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REVENUES
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
REVENUES
REVENUES
Contract Balances
The timing of revenue recognition, billings and cash collections results in the recognition of trade accounts receivable, unbilled receivables, contract assets, and customer advances and deposits (contract liabilities) on our consolidated balance sheets. Net trade accounts receivable was $2.43 billion and $2.34 billion as of December 31, 2023 and 2022.
For contract manufacturing arrangements, revenue is primarily recognized throughout the production cycle, which typically lasts up to 90 days, resulting in the recognition of contract assets until the related services are completed and the customers are billed. Additionally, for certain arrangements containing a performance obligation to deliver software that can be used with medical devices, we recognize revenue upon delivery of the software, which results in the recognition of contract assets when customers are billed over time, generally over one to five years. For
bundled contracts involving equipment delivered up-front and consumable medical products to be delivered over time, total contract revenue is allocated between the equipment and consumable medical products. In certain of those arrangements, a contract asset is created for the difference between the amount of equipment revenue recognized upon delivery and the amount of consideration initially receivable from the customer. In those arrangements, the contract asset becomes a trade account receivable as consumable medical products are provided and billed, generally over one to seven years.
The following table summarizes our contract assets:
as of December 31 (in millions)20232022
Contract manufacturing services$5 $10 
Software sales44 43 
Bundled equipment and consumable medical products contracts117 121 
Contract assets$166 $174 
Contract liabilities represent deferred revenues that arise as a result of cash received from customers or where the timing of billing for services precedes satisfaction of our performance obligations. Such remaining performance obligations represent the portion of the contract price for which work has not been performed and are primarily related to our installation and service contracts. We expect to satisfy the majority of the remaining performance obligations and recognize revenue related to installation and service contracts within the next 12 months with most of the non-current performance obligations satisfied within 24 months.
The following table summarizes contract liability activity for the years ended December 31, 2023 and 2022. The contract liability balance represents the transaction price allocated to the remaining performance obligations.
year ended December 31 (in millions)20232022
Balance at beginning of period$194 $196 
New revenue deferrals623 665 
Revenue recognized upon satisfaction of performance obligations(625)(661)
Currency translation2 (6)
Balance at end of period$194 $194 
In 2023 and 2022, $127 million and $115 million of revenue was recognized that was included in contract liabilities as of December 31, 2022 and 2021, respectively. In 2021, $17 million of revenue was recognized that was included in contract liabilities as of December 31, 2020.
The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet:
as of December 31 (in millions)20232022
Prepaid expenses and other current assets$53 $52 
Other non-current assets113 122 
Contract assets$166 $174 
Accrued expenses and other current liabilities$148 $154 
Other non-current liabilities46 40 
Contract liabilities$194 $194 
Disaggregation of Net Sales
Refer to Note 18 for additional information on our net sales including the disaggregation of net sales within each of our segments and net sales by geographic location.