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Revenue Recognition
 9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [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 15% and 23% of total revenue for the three month period ended September 30, 2021 and 2020, respectively, and 15% and 22% for the nine month period ended September 30, 2021 and 2020, 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 85% and 77% of total revenue for the three month period ended September 30, 2021 and 2020, respectively, and 85% and 78% for the nine month period ended September 30, 2021 and 2020, respectively. Refer to Note 3 to our consolidated financial statements included in our 2020 Annual Report for a more comprehensive discussion of our policies and accounting practices of revenue recognition.
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") designs and manufactures 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") designs, manufactures and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment.
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 tables present our customer revenues disaggregated by revenue source:
Three Months Ended September 30, 2021
(Amounts in thousands)FPDFCDTotal
Original Equipment$223,358 $201,890 $425,248 
Aftermarket377,750 63,120 440,870 
$601,108 $265,010 $866,118 
Three Months Ended September 30, 2020
FPDFCDTotal
Original Equipment$280,951 $198,472 $479,423 
Aftermarket388,584 56,294 444,878 
$669,535 $254,766 $924,301 
Nine Months Ended September 30, 2021
(Amounts in thousands)FPDFCDTotal
Original Equipment$657,910 $608,707 $1,266,617 
Aftermarket1,162,798 192,189 1,354,987 
$1,820,708 $800,896 $2,621,604 
Nine Months Ended September 30, 2020
FPDFCDTotal
Original Equipment$805,150 $588,448 $1,393,598 
Aftermarket1,173,065 176,163 1,349,228 
$1,978,215 $764,611 $2,742,826 
Our customer sales are diversified geographically. The following tables present our revenues disaggregated by geography, based on the shipping addresses of our customers:
Three Months Ended September 30, 2021
(Amounts in thousands)FPDFCDTotal
North America(1)$230,130 $95,854 $325,984 
Latin America(2)63,443 7,320 70,763 
Middle East and Africa 71,296 24,271 95,567 
Asia Pacific117,424 84,267 201,691 
Europe118,815 53,298 172,113 
$601,108 $265,010 $866,118 
Three Months Ended September 30, 2020
FPDFCDTotal
North America(1)$245,282 $96,435 $341,717 
Latin America(2)47,346 6,065 53,411 
Middle East and Africa83,330 29,045 112,375 
Asia Pacific151,227 66,836 218,063 
Europe142,350 56,385 198,735 
$669,535 $254,766 $924,301 
Nine Months Ended September 30, 2021
(Amounts in thousands)FPDFCDTotal
North America(1)$697,712 $284,217 $981,929 
Latin America(2)157,703 23,014 180,717 
Middle East and Africa 223,502 78,503 302,005 
Asia Pacific361,450 251,864 613,314 
Europe380,341 163,298 543,639 
$1,820,708 $800,896 $2,621,604 
Nine Months Ended September 30, 2020
FPDFCDTotal
North America(1)$782,403 $326,271 $1,108,674 
Latin America(2)136,443 18,480 154,923 
Middle East and Africa277,231 77,404 354,635 
Asia Pacific391,796 185,946 577,742 
Europe390,342 156,510 546,852 
$1,978,215 $764,611 $2,742,826 
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(1) North America represents the United States and Canada.
(2) Latin America includes Mexico.

On September 30, 2021, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $493 million. We estimate recognition of approximately $145 million of this amount as revenue in the remainder of 2021 and an additional $348 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 receive payment under the terms of a contract. A contract liability represents our right to receive payment in advance of revenue recognized for a contract.
The following tables present beginning and ending balances of contract assets and contract liabilities, current and long-term, for the nine months ended September 30, 2021 and 2020:

(Amounts in thousands) Contract Assets, net (Current)Long-term Contract Assets, net(1)Contract Liabilities (Current)Long-term Contract Liabilities(2)
Beginning balance, January 1, 2021$277,734 $1,139 $194,227 $822 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (137,305)— 
Revenue recognized in the period in excess of billings539,813 — — — 
Billings arising during the period in excess of revenue recognized— — 145,369 — 
Amounts transferred from contract assets to receivables(563,145)(61)— — 
Currency effects and other, net(18,485)(109)(3,188)(40)
Ending balance, September 30, 2021$235,917 $969 $199,103 $782 


(Amounts in thousands)Contract Assets, net (Current)Long-term Contract Assets, net(1)Contract Liabilities (Current)Long-term Contract Liabilities(2)
Beginning balance, January 1, 2020$272,914 $9,280 $221,095 $1,652 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (159,376)(1,198)
Revenue recognized in the period in excess of billings654,967 — — — 
Billings arising during the period in excess of revenue recognized— — 137,986 309 
Amounts transferred from contract assets to receivables(606,564)191 — — 
Currency effects and other, net(11,187)(6,585)(1,325)15 
Ending balance, September 30, 2020$310,130 $2,886 $198,380 $778 
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(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.