Accrued Liabilities

9 Months Ended

Sep. 30, 2015

4.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	September 30, 2015		December 31, 2014
Accrued vendor costs	$	773	$	815
Customer prepayments and billings		514		703
Compensation		295		662
Fair value of derivative financial instruments		271		297
Warranty		257		272
Taxes (non-income)		169		211
Insurance		119		126
Accrued commissions		85		97
Interest		29		11
Other		298		324

Total	$	2,810	$	3,518

Service and Product Warranties

The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience in accordance with Accounting Standards Codification (“ASC”) Topic 450 “Contingencies”. Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues and accrues for them when they are encountered.

The changes in the carrying amount of service and product warranties are as follows (in millions):


Balance at December 31, 2014	$	272

Net provisions for warranties issued during the year		58
Amounts incurred		(71	)
Currency translation adjustments and other		(2	)

Balance at September 30, 2015	$	257