Contract and Other Deferred Assets

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Contract and Other Deferred Assets

CONTRACT AND OTHER DEFERRED ASSETS

The majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following at December 31:

	2020		2019
Long-term product service agreements	$	660	$	603
Long-term equipment contracts (1)	1,160		1,097
Contract assets (total revenue in excess of billings)	1,820		1,700
Deferred inventory costs	138		130
Non-recurring engineering costs	43		51
Contract and other deferred assets	$	2,001	$	1,881

(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.

Revenue recognized during the year ended December 31, 2020 and 2019 from performance obligations satisfied (or partially satisfied) in previous years related to our long-term service agreements was $17 million and $(1) 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.