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Revenue Recognition
 12 Months Ended
Dec. 31, 2020
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue Recognition REVENUE RECOGNITION
The majority of our revenues relate to customer orders that typically contain a single commitment of goods or services which have lead times under a year. Longer lead time, more complex contracts with our customers typically have multiple commitments of goods and services, including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of our work as we perform.
Our primary method for recognizing revenue over time is the percentage of completion ("POC") method. Revenue from products and services transferred to customers over time accounted for approximately 22%, 19% and 22% of total revenue for the years ended December 31, 2020, 2019 and 2018, respectively. If control does not transfer over time, then control transfers at a point in time. We recognize revenue at a point in time at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 78%, 81% and 78% of total revenue for the years ended December 31, 2020, 2019 and 2018, respectively.
Disaggregated Revenue
We conduct our operations through two business segments based on the type of product and how we manage the business:
•Flowserve Pump Division ("FPD") for custom, highly-engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and
•Flow Control Division ("FCD") for engineered and industrial valves, control valves, actuators and controls and related services.
Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly-engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generate Original Equipment and Aftermarket revenues.
The following table presents our customer revenues disaggregated by revenue source:
December 31, 2020
(Amounts in thousands)FPDFCDTotal
Original Equipment$1,091,906 $808,585 $1,900,491 
Aftermarket1,581,799 245,844 1,827,643 
$2,673,705 $1,054,429 $3,728,134 
December 31, 2019
(Amounts in thousands)FPDFCDTotal
Original Equipment$994,719 $967,271 $1,961,990 
Aftermarket1,709,726 267,981 1,977,707 
$2,704,445 $1,235,252 $3,939,697 
December 31, 2018
(Amounts in thousands)FPDFCDTotal
Original Equipment$992,162 $946,926 $1,939,088 
Aftermarket1,628,326 268,285 1,896,611 
$2,620,488 $1,215,211 $3,835,699 
Our customer sales are diversified geographically. The following table presents our revenues disaggregated by geography, based on the shipping addresses of our customers:
December 31, 2020
(Amounts in thousands)FPDFCDTotal
North America(1)$1,039,285 $429,572 $1,468,857 
Latin America(1)191,517 26,393 217,910 
Middle East and Africa 359,403 110,539 469,942 
Asia Pacific537,792 270,238 808,030 
Europe545,708 217,687 763,395 
$2,673,705 $1,054,429 $3,728,134 
December 31, 2019
(Amounts in thousands)FPDFCDTotal
North America(1)$1,085,627 $542,182 $1,627,809 
Latin America(1)202,247 28,899 231,146 
Middle East and Africa355,937 98,959 454,896 
Asia Pacific499,932 315,886 815,818 
Europe560,702 249,326 810,028 
$2,704,445 $1,235,252 $3,939,697 
December 31, 2018
(Amounts in thousands)FPDFCDTotal
North America(1)$1,037,637 $541,378 $1,579,015 
Latin America(1)219,376 22,405 241,781 
Middle East and Africa329,484 138,240 467,724 
Asia Pacific502,559 281,080 783,639 
Europe531,432 232,108 763,540 
$2,620,488 $1,215,211 $3,835,699 
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(1) North America represents United States and Canada; Latin America includes Mexico.
On December 31, 2020, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year was approximately $541 million. We estimate recognition of approximately $412 million of this amount as revenue in 2021 and an additional $129 million in 2022 and thereafter.
Contract Balances
We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to bill the customer under the terms of a contract. A contract liability represents our contractual billings in advance of revenue recognized for a contract.
The following table presents opening and closing balances of contract assets and contract liabilities, current and long-term, for the years ended December 31, 2020 and 2019:
( Amounts in thousands) Contract Assets, net (Current)Long-term Contract Assets, net(1)Contract Liabilities (Current)Long-term Contract Liabilities(2)
Balance — January 1, 2019
$229,297 $10,967 $201,702 $1,370 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (125,257)— 
Increase due to revenue recognized in the period in excess of billings835,147 — — — 
Increase due to billings arising during the period in excess of revenue recognized— — 135,679 290 
Amounts transferred from contract assets to receivables(785,279)(1,747)— — 
Currency effects and other, net(6,251)60 8,971 (8)
Balance — December 31, 2019
$272,914 $9,280 $221,095 $1,652 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (180,522)— 
Increase due to revenue recognized in the period in excess of billings925,244 — — — 
Increase due to billings arising during the period in excess of revenue recognized— — 140,391 — 
Amounts transferred from contract assets to receivables(917,885)(1,666)— — 
Currency effects and other, net(2,539)(6,475)13,263 (830)
Balance — December 31, 2020
$277,734 $1,139 $194,227 $822 
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(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.