REVENUE RECOGNITION (Tables)

3 Months Ended

Jun. 30, 2026

REVENUE RECOGNITION

Schedule of reconciliation of contract balances


		June 30,			March 31,
(Dollars in millions)		2026			2026
Assets
Accounts receivable (net of allowances for credit losses of $5 at June 30, 2026 and $7 at March 31, 2026)⁽¹⁾		$	1,248		$	1,300
Long-term accounts receivable⁽²⁾			121			80
Sales-type leases receivable			166			156
Contract assets⁽³⁾			57			44
Total		$	1,592		$	1,580
Liabilities
Deferred income (current)		$	876		$	888
Deferred income (noncurrent)			378			390
Total		$	1,255		$	1,279

(1)	Includes unbilled receivable balances of $470 million at June 30, 2026 and $431 million at March 31, 2026.

(2)	Long-term accounts receivable includes unbilled receivable balances of $42 million at June 30, 2026 and $46 million at March 31, 2026, and is included within Other noncurrent assets in the Consolidated Balance Sheet.

(3)

Contract assets represent services performed by the Company prior to billing the client, which give the Company the right to consideration that is typically subject to milestone completion or client acceptance. They are included within Prepaid expenses and other current assets in the Consolidated Balance Sheet.

Schedule of notes and accounts receivable allowance for expected credit losses


		Three Months Ended June 30,
(Dollars in millions)		2026			2025
Beginning balance		$	7		$	13
Additions (releases)			(1)			(3)
Write-offs			(1)			(1)
Other*			—			1
Ending balance		$	5		$	9

*	Primarily represents translation adjustments.

Schedule of capitalized costs to acquire and fulfill customer contracts


		June 30,			March 31,
(Dollars in millions)		2026			2026
Deferred transition costs		$	748		$	761
Prepaid software costs⁽¹⁾			1,735			1,809
Capitalized costs to fulfill contracts			218			208
Capitalized costs to obtain contracts			268			268
Total deferred costs⁽²⁾		$	2,968		$	3,046

(1)	Prepaid software costs include deferred costs for committed multi-year, on-premises software purchase contracts.

(2)	Of the total deferred costs, $1,146 million was current and $1,822 million was noncurrent at June 30, 2026, and $1,166 million was current and $1,880 million was noncurrent at March 31, 2026.