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Revenue Recognition
 3 Months Ended
Mar. 31, 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.
Our primary method for recognizing revenue over time is the POC method. Revenue from products and services transferred to customers over time accounted for approximately 14% and 12% of total revenue for the three month period ended March 31, 2023 and 2022, 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 86% and 88% of total revenue for the three month period ended March 31, 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.
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 March 31, 2023
(Amounts in thousands)FPDFCDTotal
Original Equipment$252,732 $210,753 $463,485 
Aftermarket446,746 70,074 516,820 
$699,478 $280,827 $980,305 
Three Months Ended March 31, 2022
FPDFCDTotal
Original Equipment$200,340 $182,842 $383,182 
Aftermarket373,646 64,230 437,876 
$573,986 $247,072 $821,058 
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 March 31, 2023
(Amounts in thousands)FPDFCDTotal
North America(1)$282,272 $125,681 $407,953 
Latin America(2)63,989 7,863 71,852 
Middle East and Africa 114,370 28,401 142,771 
Asia Pacific113,371 67,828 181,199 
Europe125,476 51,054 176,530 
$699,478 $280,827 $980,305 
Three Months Ended March 31, 2022
FPDFCDTotal
North America(1)$238,710 $107,634 $346,344 
Latin America(2)47,619 5,550 53,169 
Middle East and Africa71,701 21,351 93,052 
Asia Pacific101,599 67,793 169,392 
Europe114,357 44,744 159,101 
$573,986 $247,072 $821,058 
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(1) North America represents the United States and Canada.
(2) Latin America includes Mexico.

On March 31, 2023, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $733 million. We estimate recognition of approximately $358 million of this amount as revenue in the remainder of 2023 and an additional $375 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 three months ended March 31, 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— — (117,035)— 
Revenue recognized in the period in excess of billings136,965 4 — — 
Billings arising during the period in excess of revenue recognized— — 146,262 164 
Amounts transferred from contract assets to receivables(137,865)— — — 
Currency effects and other, net(693)4 5,448 2,983 
Ending balance, March 31, 2023$231,864 $305 $291,638 $4,206 


(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— — (79,792)— 
Revenue recognized in the period in excess of billings116,140 1,757 — — 
Billings arising during the period in excess of revenue recognized— — 78,156 — 
Amounts transferred from contract assets to receivables(109,358)— — — 
Currency effects and other, net(2,326)(1,750)2,829 (2)
Ending balance, March 31, 2022$200,054 $433 $204,158 $462 
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(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.