Accrued Liabilities

3 Months Ended

Mar. 31, 2017

3.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	March 31, 2017		December 31, 2016
Vendor costs	$	236	$	235
Customer prepayments and billings		232		222
Compensation		222		181
Warranty		169		172
Taxes (non-income)		121		176
Insurance		101		103
Commissions		61		57
Fair value of derivative financial instruments		53		66
Interest		29		8
Other		288		348

Total	$	1,512	$	1,568

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, 2016	$	172

Net provisions for warranties issued during the year		16
Amounts incurred		(25	)
Currency translation adjustments and other		6

Balance at March 31, 2017	$	169