CONTRACT AND OTHER DEFERRED ASSETS

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

CONTRACT AND OTHER DEFERRED ASSETS

CONTRACT AND OTHER DEFERRED ASSETS

Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, provide long-term product service and maintenance or extended warranty arrangements and other deferred contract related costs. Our long-term product service agreements are provided by our IET segment. Our long-term equipment contracts are provided by both our IET and OFSE segments. Contract assets are comprised of the following:

	March 31, 2023		December 31, 2022
Long-term product service agreements	$	396	$	392
Long-term equipment contracts and certain other service agreements	1,034		955
Contract assets (total revenue in excess of billings)	1,430		1,347
Deferred inventory costs	142		125
Other costs to fulfill or obtain a contract (1)	31		31
Contract and other deferred assets	$	1,603	$	1,503

(1)     Other costs to fulfill or obtain a contract consist primarily of non-recurring engineering costs incurred and expected to be recovered.

Revenue recognized during the three months ended March 31, 2023 and 2022 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $1 million and $(4) million, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract’s total estimated profitability resulting in an adjustment of earnings.