Financial Statements 2023

2. Notes to the IFRS Consolidated Financial Statements 2.5 Operational Assets and Liabilities

22.

Contract Assets and Contract Liabilities, Trade Receivables and Trade Liabilities

Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditioned by something other than the passage of time ( e.g. revenue recognised from the application of the PoC method before the Company has a right to invoice). Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration, or for which an amount of consideration is due from the customer ( e.g. advance payments received). Net contract assets and contract liabilities are determined for each contract separately. For serial contracts, contract liabilities are presented in current contract liabilities, if revenues are expected within the next twelve months or material expenses for the manufacturing process have already occurred. For long ‑ term production contracts ( e.g.

governmental contracts such as A400M, Tiger, NH90), contract liabilities are classified as current when the relating inventories or receivables are expected to be recognised within the normal operating cycle of the long ‑ term contract. Trade receivables arise when the Company provides goods or services directly to a customer with no intention of trading the receivable. Trade receivables include claims arising from revenue recognition that are not yet settled by the debtor. Trade receivables are initially recognised at their transaction prices and are subsequently measured at amortised cost less any allowances for impairment. Gains and losses are recognised in the Consolidated Income Statement when the receivables are derecognised and impaired. Impairment and allowances of trade receivables and contract assets are measured at an amount equal to the life ‑ time expected loss as described in “– Note 37: Financial Instruments”.

Contract Assets, Contract Liabilities and Trade Receivables

Significant changes in contract assets and contract liabilities during the period are as follows:

2023

2022

Contract assets

Contract liabilities

Contract assets

Contract liabilities

(In € million)

Revenue recognised that was included in the contract liability balance at 1 January

-

(26,175)

-

(23,494)

Increases due to cash received, excluding amounts recognised as revenue (1)

-

29,198

-

26,797

Transfers from contract assets recognised at 1 January

(2,168)

-

(2,798)

-

Increase as a result of changes in the measure of progress

2,509

-

3,034

-

Including final payments received from customers and others parties in anticipation. (1)

As of 31 December 2023, trade receivables amounting to €227 million (2022: €301 million) will mature after more than one year. The respective movement in the allowance for expected credit losses in respect of trade receivables and contract assets during the period was as follows:

2023

(In € million)

2022

Allowance balance at 1 January

(380)

(363)

Utilisations / disposals and business combinations

86

56

Additions

(65)

(73)

Allowance balance at 31 December

(359)

(380)

44

Airbus

Financial Statements 2023