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REVENUE RECOGNITION
9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITIONThe Company accounts for revenue in accordance with ASC 606: Revenue from Contracts with Customers. Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A significant portion of the Company's performance obligations are recognized at a point-in-time when control of the product transfers to the customer, which is generally at the time of shipment. The remaining portion of the Company’s performance obligations are recognized over time as the customer simultaneously obtains control as the Company performs work under a contract, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment.
Sales disaggregated by product and service are as follows:

 Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2023202220232022
Sales Type
Product$3,533 $3,330 $10,488 $8,974 
Service475 404 1,358 1,118 
HVAC sales4,008 3,734 11,846 10,092 
Product808 811 2,453 2,603 
Service116 112 341 337 
Refrigeration sales924 923 2,794 2,940 
Product864 859 2,546 2,468 
Service59 46 178 142 
Fire & Security sales923 905 2,724 2,610 
Total segment sales5,855 5,562 17,364 15,642 
Eliminations and other(124)(111)(368)(326)
Net sales$5,731 $5,451 $16,996 $15,316 

Contract Balances

Total contract assets and contract liabilities consisted of the following:

(In millions)September 30,
2023
December 31,
2022
Contract assets, current$605 $537 
Contract assets, non-current (included within Other assets)
18 
Total contract assets623 543 
Contract liabilities, current(496)(449)
Contract liabilities, non-current (included within Other long-term liabilities)
(166)(174)
Total contract liabilities (662)(623)
Net contract assets (liabilities)$(39)$(80)

The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities. Contract assets relate to the conditional right to consideration for any completed performance under a contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Contract liabilities relate to payments received in advance of performance under a contract or when the Company has a right to consideration that is conditioned upon transfer of a good or service to a customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.

The Company recognized revenue of $325 million during the nine months ended September 30, 2023 that related to contract liabilities as of January 1, 2023. The Company expects a majority of its current contract liabilities at the end of the period to be recognized as revenue in the next 12 months.