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REVENUE RECOGNITION | 6 Months Ended
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Jun. 30, 2023
Revenue from Contract with Customer [Abstract] |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company accounts for revenue in accordance with ASC 606: Revenue from Contracts with Customers. Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally at the time of shipment. The remaining portion of the Company’s performance obligations are recognized over time as the customer simultaneously obtains control as the Company performs work under a contract, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment. Sales disaggregated by product and service are as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Sales Type |  |  |  |  |  |  |  |
Product |  | $ | 3,754 |  |  | $ | 3,005 |  |  | $ | 6,955 |  |  | $ | 5,644 |
Service |  | 462 |  |  | 383 |  |  | 883 |  |  | 714 |
HVAC sales |  | 4,216 |  |  | 3,388 |  |  | 7,838 |  |  | 6,358 |
Product |  | 858 |  |  | 925 |  |  | 1,645 |  |  | 1,792 |
Service |  | 114 |  |  | 116 |  |  | 225 |  |  | 225 |
Refrigeration sales |  | 972 |  |  | 1,041 |  |  | 1,870 |  |  | 2,017 |
Product |  | 869 |  |  | 838 |  |  | 1,682 |  |  | 1,609 |
Service |  | 63 |  |  | 49 |  |  | 119 |  |  | 96 |
Fire & Security sales |  | 932 |  |  | 887 |  |  | 1,801 |  |  | 1,705 |
Total segment sales |  | 6,120 |  |  | 5,316 |  |  | 11,509 |  |  | 10,080 |
Eliminations and other |  | (128) |  |  | (105) |  |  | (244) |  |  | (215) |
Net sales |  | $ | 5,992 |  |  | $ | 5,211 |  |  | $ | 11,265 |  |  | $ | 9,865 |
Contract Balances Total contract assets and contract liabilities consisted of the following:
(In millions) |  | June 30, 2023 |  | December 31, 2022
Contract assets, current |  | $ | 578 |  |  | $ | 537 |
Contract assets, non-current (included within Other assets) |  | 8 |  |  | 6 |
Total contract assets |  | 586 |  |  | 543 |
Contract liabilities, current |  | (483) |  |  | (449) |
Contract liabilities, non-current (included within Other long-term liabilities) |  | (170) |  |  | (174) |
Total contract liabilities |  | (653) |  |  | (623) |
Net contract assets (liabilities) |  | $ | (67) |  |  | $ | (80) |
The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities. Contract assets relate to the conditional right to consideration for any completed performance under a contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Contract liabilities relate to payments received in advance of performance under a contract or when the Company has a right to consideration that is conditioned upon transfer of a good or service to a customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. The Company recognized revenue of $264 million during the six months ended June 30, 2023 that related to contract liabilities as of January 1, 2023. The Company expects a majority of its current contract liabilities at the end of the period to be recognized as revenue in the next 12 months.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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