Amounts charged off and other deductions

[Table of Contents](#ib0ff9808fe764fdea19589324372f96b_7)Abbott Laboratories and SubsidiariesNotes to the Condensed Consolidated Financial StatementsSeptember 30, 2022(Unaudited)Note 2 — Revenue (Continued)Other Contract Assets and Liabilities  
Abbott discloses Trade receivables separately in the Condensed Consolidated Balance Sheet at the net amount expected to be collected. Contract assets primarily relate to Abbott’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets at the beginning and end of the period, as well as the changes in the balance, were not significant.  
Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. Abbott’s contract liabilities arise primarily in the Medical Devices reportable segment when payment is received upfront for various multi-period extended service arrangements.  
Changes in the contract liabilities during the period are as follows:  


|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| (in millions) |  |  |
| Contract Liabilities: |  |  |
| Balance at December 31, 2021 |  | $ | 520  |  |
| Unearned revenue from cash received during the period |  | 466  |  |
| Revenue recognized related to contract liability balance |  | (508) |  |
| Balance at September 30, 2022 |  | $ | 478  |  |

  
Note 3 — Supplemental Financial Information  
Shares of unvested restricted stock that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method. Under the two-class method, net earnings are allocated between common shares and participating securities. Net earnings allocated to common shares for the three months ended September 30, 2022 and 2021 were $1.429 billion and $2.092 billion, respectively, and for the nine months ended September 30, 2022 and 2021 were $5.876 billion and $5.061 billion, respectively.  
Other, net in Net cash from operating activities in the Condensed Consolidated Statement of Cash Flows for the first nine months of 2022 includes $362 million of pension contributions and the payment of cash taxes of approximately $987 million. The first nine months of 2021 includes $366 million of pension contributions and the payment of cash taxes of approximately $990 million.  
The following summarizes the activity for the first nine months of 2022 related to the allowance for doubtful accounts as of September 30, 2022:  


|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| (in millions) |  |  |
| Allowance for Doubtful Accounts: |  |  |
| Balance at December 31, 2021 |  | $ | 313  |  |
| Provisions/charges to income |  | 10  |  |
| Amounts charged off and other deductions |  | (49) |  |
| Balance at September 30, 2022 |  | $ | 274  |  |

  
The allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the accounts receivable. Abbott considers various factors in establishing, monitoring, and adjusting its allowance for doubtful accounts, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific exposures related to particular customers. Abbott also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.11
