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Revenue Recognition
 9 Months Ended
Sep. 30, 2023
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. Service-related revenues do not typically represent a significant portion of contracts with our customers and do not meet the thresholds requiring separate disclosure.
Revenue from products and services transferred to customers over time accounted for approximately 16% and 12% of total revenue for the three month period ended September 30, 2023 and 2022, respectively, and 15% and 12% for the nine month period ended September 30, 2023 and 2022, respectively. Our primary method for recognizing revenue over time is the POC method. 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 84% and 88% of total revenue for the three month period ended September 30, 2023 and 2022, respectively, and 85% and 88% for the nine month period ended September 30, 2023 and 2022, respectively. Refer to Note 2 to our consolidated financial statements included in our 2022 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 and 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 tables present our customer revenues disaggregated by revenue source:
Three Months Ended September 30, 2023
(Amounts in thousands)FPDFCDTotal
Original Equipment$284,323 $244,862 $529,185 
Aftermarket480,990 84,543 565,533 
$765,313 $329,405 $1,094,718 
Three Months Ended September 30, 2022
FPDFCDTotal
Original Equipment$196,539 $215,550 $412,089 
Aftermarket394,807 65,985 460,792 
$591,346 $281,535 $872,881 
Nine Months Ended September 30, 2023
(Amounts in thousands)FPDFCDTotal
Original Equipment$821,107 $689,384 $1,510,491 
Aftermarket1,408,536 236,372 1,644,908 
$2,229,643 $925,756 $3,155,399 
Nine Months Ended September 30, 2022
FPDFCDTotal
Original Equipment$609,640 $596,989 $1,206,629 
Aftermarket1,170,117 199,415 1,369,532 
$1,779,757 $796,404 $2,576,161 
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, 2023
(Amounts in thousands)FPDFCDTotal
North America(1)$320,182 $134,246 $454,428 
Latin America(2)72,637 7,329 79,966 
Middle East and Africa 129,370 43,134 172,504 
Asia Pacific106,455 87,265 193,720 
Europe136,669 57,431 194,100 
$765,313 $329,405 $1,094,718 
Three Months Ended September 30, 2022
FPDFCDTotal
North America(1)$249,968 $117,262 $367,230 
Latin America(2)49,063 6,959 56,022 
Middle East and Africa90,598 23,994 114,592 
Asia Pacific89,794 80,770 170,564 
Europe111,923 52,550 164,473 
$591,346 $281,535 $872,881 
Nine Months Ended September 30, 2023
(Amounts in thousands)FPDFCDTotal
North America(1)$920,433 $403,368 $1,323,801 
Latin America(2)199,730 22,385 222,115 
Middle East and Africa 373,891 108,066 481,957 
Asia Pacific330,243 227,608 557,851 
Europe405,346 164,329 569,675 
$2,229,643 $925,756 $3,155,399 
Nine Months Ended September 30, 2022
FPDFCDTotal
North America(1)$754,337 $344,690 $1,099,027 
Latin America(2)144,974 17,463 162,437 
Middle East and Africa247,205 67,392 314,597 
Asia Pacific288,971 220,980 509,951 
Europe344,270 145,879 490,149 
$1,779,757 $796,404 $2,576,161 
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(1) North America represents the United States and Canada.
(2) Latin America includes Mexico.

On September 30, 2023, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $807 million. We estimate recognition of approximately $195 million of this amount as revenue in the remainder of 2023 and an additional $612 million in 2024 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, 2023 and 2022:

(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, 2023$233,457 $297 $256,963 $1,059 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (191,728)— 
Revenue recognized in the period in excess of billings562,582 899 — — 
Billings arising during the period in excess of revenue recognized— — 203,692 562 
Amounts transferred from contract assets to receivables(546,247)(424)— — 
Currency effects and other, net(4,659)221 1,798 (573)
Ending balance, September 30, 2023$245,133 $993 $270,725 $1,048 


(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, 2022$195,598 $426 $202,965 $464 
Revenue recognized that was included in contract liabilities at the beginning of the period— — (133,730)— 
Revenue recognized in the period in excess of billings417,430 — — — 
Billings arising during the period in excess of revenue recognized— — 155,584 7 
Amounts transferred from contract assets to receivables(392,199)(1,406)— — 
Currency effects and other, net(15,593)987 (8,725)(38)
Ending balance, September 30, 2022$205,236 $7 $216,094 $433 
_____________________________________
(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.