diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/CompositionRefreshArgs.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/CompositionRefreshArgs.h
index 6f689ad..90158c7 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/CompositionRefreshArgs.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/CompositionRefreshArgs.h
@@ -18,6 +18,7 @@
 
 #include <chrono>
 #include <optional>
+#include <vector>
 
 #include <compositionengine/Display.h>
 #include <compositionengine/Layer.h>
@@ -28,6 +29,7 @@
 
 using Layers = std::vector<std::shared_ptr<compositionengine::Layer>>;
 using Outputs = std::vector<std::shared_ptr<compositionengine::Output>>;
+using RawLayers = std::vector<compositionengine::Layer*>;
 
 /**
  * A parameter object for refreshing a set of outputs
@@ -41,6 +43,9 @@
     // front.
     Layers layers;
 
+    // All the layers that have queued updates.
+    RawLayers layersWithQueuedFrames;
+
     // If true, forces the entire display to be considered dirty and repainted
     bool repaintEverything{false};
 
@@ -53,6 +58,9 @@
     // Forces a color mode on the outputs being refreshed
     ui::ColorMode forceOutputColorMode{ui::ColorMode::NATIVE};
 
+    // If true, the complete output geometry needs to be recomputed this frame
+    bool updatingOutputGeometryThisFrame{false};
+
     // If true, there was a geometry update this frame
     bool updatingGeometryThisFrame{false};
 
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/LayerFE.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/LayerFE.h
index 57cca69..e585769 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/LayerFE.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/LayerFE.h
@@ -17,6 +17,7 @@
 #pragma once
 
 #include <optional>
+#include <unordered_set>
 
 #include <renderengine/LayerSettings.h>
 #include <utils/RefBase.h>
@@ -99,5 +100,13 @@
     virtual const char* getDebugName() const = 0;
 };
 
+// TODO(b/121291683): Specialize std::hash<> for sp<T> so these and others can
+// be removed.
+struct LayerFESpHash {
+    size_t operator()(const sp<LayerFE>& p) const { return std::hash<LayerFE*>()(p.get()); }
+};
+
+using LayerFESet = std::unordered_set<sp<LayerFE>, LayerFESpHash>;
+
 } // namespace compositionengine
 } // namespace android
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/Output.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/Output.h
index 80fce2c..d374baa 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/Output.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/Output.h
@@ -21,6 +21,7 @@
 #include <string>
 #include <unordered_map>
 
+#include <compositionengine/LayerFE.h>
 #include <renderengine/LayerSettings.h>
 #include <ui/Fence.h>
 #include <ui/GraphicTypes.h>
@@ -71,6 +72,22 @@
         ui::Dataspace colorSpaceAgnosticDataspace{ui::Dataspace::UNKNOWN};
     };
 
+    // Use internally to incrementally compute visibility/coverage
+    struct CoverageState {
+        explicit CoverageState(LayerFESet& latchedLayers) : latchedLayers(latchedLayers) {}
+
+        // The set of layers that had been latched for the coverage calls, to
+        // avoid duplicate requests to obtain the same front-end layer state.
+        LayerFESet& latchedLayers;
+
+        // The region of the output which is covered by layers
+        Region aboveCoveredLayers;
+        // The region of the output which is opaquely covered by layers
+        Region aboveOpaqueLayers;
+        // The region of the output which should be considered dirty
+        Region dirtyRegion;
+    };
+
     virtual ~Output();
 
     // Returns true if the output is valid. This is meant to be checked post-
@@ -164,7 +181,7 @@
     virtual ReleasedLayers takeReleasedLayers() = 0;
 
     // Prepare the output, updating the OutputLayers used in the output
-    virtual void prepare(CompositionRefreshArgs&) = 0;
+    virtual void prepare(const CompositionRefreshArgs&, LayerFESet&) = 0;
 
     // Presents the output, finalizing all composition details
     virtual void present(const CompositionRefreshArgs&) = 0;
@@ -176,6 +193,13 @@
     virtual void setDisplayColorProfile(std::unique_ptr<DisplayColorProfile>) = 0;
     virtual void setRenderSurface(std::unique_ptr<RenderSurface>) = 0;
 
+    virtual void rebuildLayerStacks(const compositionengine::CompositionRefreshArgs&,
+                                    LayerFESet&) = 0;
+    virtual void collectVisibleLayers(const CompositionRefreshArgs&, CoverageState&) = 0;
+    virtual std::unique_ptr<OutputLayer> getOutputLayerIfVisible(
+            std::shared_ptr<compositionengine::Layer>, CoverageState&) = 0;
+    virtual void setReleasedLayers(const compositionengine::CompositionRefreshArgs&) = 0;
+
     virtual void updateAndWriteCompositionState(const CompositionRefreshArgs&) = 0;
     virtual void setColorTransform(const CompositionRefreshArgs&) = 0;
     virtual void updateColorProfile(const CompositionRefreshArgs&) = 0;
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Display.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Display.h
index 2e595d6..b5d8325 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Display.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Display.h
@@ -42,6 +42,8 @@
     void dump(std::string&) const override;
     std::unique_ptr<compositionengine::OutputLayer> createOutputLayer(
             const std::shared_ptr<Layer>&, const sp<LayerFE>&) const override;
+    using compositionengine::impl::Output::setReleasedLayers;
+    void setReleasedLayers(const compositionengine::CompositionRefreshArgs&) override;
     void setColorTransform(const compositionengine::CompositionRefreshArgs&) override;
     void setColorProfile(const ColorProfile&) override;
     void chooseCompositionStrategy() override;
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Output.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Output.h
index 6dde86d..fa6cd27 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Output.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/Output.h
@@ -77,9 +77,17 @@
     void setReleasedLayers(ReleasedLayers&&) override;
     ReleasedLayers takeReleasedLayers() override;
 
-    void prepare(compositionengine::CompositionRefreshArgs&) override;
+    void prepare(const compositionengine::CompositionRefreshArgs&, LayerFESet&) override;
     void present(const compositionengine::CompositionRefreshArgs&) override;
 
+    void rebuildLayerStacks(const compositionengine::CompositionRefreshArgs&, LayerFESet&) override;
+    void collectVisibleLayers(const compositionengine::CompositionRefreshArgs&,
+                              compositionengine::Output::CoverageState&) override;
+    std::unique_ptr<compositionengine::OutputLayer> getOutputLayerIfVisible(
+            std::shared_ptr<compositionengine::Layer>,
+            compositionengine::Output::CoverageState&) override;
+    void setReleasedLayers(const compositionengine::CompositionRefreshArgs&) override;
+
     void updateLayerStateFromFE(const CompositionRefreshArgs&) const override;
     void updateAndWriteCompositionState(const compositionengine::CompositionRefreshArgs&) override;
     void updateColorProfile(const compositionengine::CompositionRefreshArgs&) override;
@@ -91,11 +99,14 @@
     void postFramebuffer() override;
 
     // Testing
+    const ReleasedLayers& getReleasedLayersForTest() const;
     void setDisplayColorProfileForTest(std::unique_ptr<compositionengine::DisplayColorProfile>);
     void setRenderSurfaceForTest(std::unique_ptr<compositionengine::RenderSurface>);
 
 protected:
     const CompositionEngine& getCompositionEngine() const;
+    std::unique_ptr<compositionengine::OutputLayer> takeOutputLayerForLayer(
+            compositionengine::Layer*);
     void chooseCompositionStrategy() override;
     bool getSkipColorTransform() const override;
     compositionengine::Output::FrameFences presentAndGetFrameFences() override;
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/mock/Output.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/mock/Output.h
index 8cf7f79..286a20f 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/mock/Output.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/mock/Output.h
@@ -79,9 +79,20 @@
     MOCK_METHOD1(setReleasedLayers, void(ReleasedLayers&&));
     MOCK_METHOD0(takeReleasedLayers, ReleasedLayers());
 
-    MOCK_METHOD1(prepare, void(compositionengine::CompositionRefreshArgs&));
+    MOCK_METHOD2(prepare, void(const compositionengine::CompositionRefreshArgs&, LayerFESet&));
     MOCK_METHOD1(present, void(const compositionengine::CompositionRefreshArgs&));
 
+    MOCK_METHOD2(rebuildLayerStacks,
+                 void(const compositionengine::CompositionRefreshArgs&, LayerFESet&));
+    MOCK_METHOD2(collectVisibleLayers,
+                 void(const compositionengine::CompositionRefreshArgs&,
+                      compositionengine::Output::CoverageState&));
+    MOCK_METHOD2(getOutputLayerIfVisible,
+                 std::unique_ptr<compositionengine::OutputLayer>(
+                         std::shared_ptr<compositionengine::Layer>,
+                         compositionengine::Output::CoverageState&));
+    MOCK_METHOD1(setReleasedLayers, void(const compositionengine::CompositionRefreshArgs&));
+
     MOCK_CONST_METHOD1(updateLayerStateFromFE, void(const CompositionRefreshArgs&));
     MOCK_METHOD1(updateAndWriteCompositionState, void(const CompositionRefreshArgs&));
     MOCK_METHOD1(updateColorProfile, void(const compositionengine::CompositionRefreshArgs&));
diff --git a/services/surfaceflinger/CompositionEngine/src/CompositionEngine.cpp b/services/surfaceflinger/CompositionEngine/src/CompositionEngine.cpp
index 590c596..713266f 100644
--- a/services/surfaceflinger/CompositionEngine/src/CompositionEngine.cpp
+++ b/services/surfaceflinger/CompositionEngine/src/CompositionEngine.cpp
@@ -72,8 +72,20 @@
 }
 
 void CompositionEngine::present(CompositionRefreshArgs& args) {
-    for (const auto& output : args.outputs) {
-        output->prepare(args);
+    ATRACE_CALL();
+    ALOGV(__FUNCTION__);
+
+    preComposition(args);
+
+    {
+        // latchedLayers is used to track the set of front-end layer state that
+        // has been latched across all outputs for the prepare step, and is not
+        // needed for anything else.
+        LayerFESet latchedLayers;
+
+        for (const auto& output : args.outputs) {
+            output->prepare(args, latchedLayers);
+        }
     }
 
     updateLayerStateFromFE(args);
diff --git a/services/surfaceflinger/CompositionEngine/src/Display.cpp b/services/surfaceflinger/CompositionEngine/src/Display.cpp
index 49727df..fe8fa21 100644
--- a/services/surfaceflinger/CompositionEngine/src/Display.cpp
+++ b/services/surfaceflinger/CompositionEngine/src/Display.cpp
@@ -158,6 +158,39 @@
     return result;
 }
 
+void Display::setReleasedLayers(const compositionengine::CompositionRefreshArgs& refreshArgs) {
+    Output::setReleasedLayers(refreshArgs);
+
+    if (!mId || refreshArgs.layersWithQueuedFrames.empty()) {
+        return;
+    }
+
+    // For layers that are being removed from a HWC display, and that have
+    // queued frames, add them to a a list of released layers so we can properly
+    // set a fence.
+    compositionengine::Output::ReleasedLayers releasedLayers;
+
+    // Any non-null entries in the current list of layers are layers that are no
+    // longer going to be visible
+    for (auto& layer : getOutputLayersOrderedByZ()) {
+        if (!layer) {
+            continue;
+        }
+
+        sp<compositionengine::LayerFE> layerFE(&layer->getLayerFE());
+        const bool hasQueuedFrames =
+                std::find(refreshArgs.layersWithQueuedFrames.cbegin(),
+                          refreshArgs.layersWithQueuedFrames.cend(),
+                          &layer->getLayer()) != refreshArgs.layersWithQueuedFrames.cend();
+
+        if (hasQueuedFrames) {
+            releasedLayers.emplace_back(layerFE);
+        }
+    }
+
+    setReleasedLayers(std::move(releasedLayers));
+}
+
 void Display::chooseCompositionStrategy() {
     ATRACE_CALL();
     ALOGV(__FUNCTION__);
diff --git a/services/surfaceflinger/CompositionEngine/src/Output.cpp b/services/surfaceflinger/CompositionEngine/src/Output.cpp
index a9b1d55..83df628 100644
--- a/services/surfaceflinger/CompositionEngine/src/Output.cpp
+++ b/services/surfaceflinger/CompositionEngine/src/Output.cpp
@@ -40,6 +40,27 @@
 
 namespace impl {
 
+namespace {
+
+template <typename T>
+class Reversed {
+public:
+    explicit Reversed(const T& container) : mContainer(container) {}
+    auto begin() { return mContainer.rbegin(); }
+    auto end() { return mContainer.rend(); }
+
+private:
+    const T& mContainer;
+};
+
+// Helper for enumerating over a container in reverse order
+template <typename T>
+Reversed<T> reversed(const T& c) {
+    return Reversed<T>(c);
+}
+
+} // namespace
+
 Output::Output(const CompositionEngine& compositionEngine)
       : mCompositionEngine(compositionEngine) {}
 
@@ -176,6 +197,10 @@
     mDisplayColorProfile = std::move(mode);
 }
 
+const Output::ReleasedLayers& Output::getReleasedLayersForTest() const {
+    return mReleasedLayers;
+}
+
 void Output::setDisplayColorProfileForTest(
         std::unique_ptr<compositionengine::DisplayColorProfile> mode) {
     mDisplayColorProfile = std::move(mode);
@@ -238,15 +263,24 @@
     return nullptr;
 }
 
-std::unique_ptr<compositionengine::OutputLayer> Output::getOrCreateOutputLayer(
-        std::shared_ptr<compositionengine::Layer> layer, sp<compositionengine::LayerFE> layerFE) {
+std::unique_ptr<compositionengine::OutputLayer> Output::takeOutputLayerForLayer(
+        compositionengine::Layer* layer) {
+    // Removes the outputLayer from mOutputLayersorderedByZ and transfers ownership to the caller.
     for (auto& outputLayer : mOutputLayersOrderedByZ) {
-        if (outputLayer && &outputLayer->getLayer() == layer.get()) {
+        if (outputLayer && &outputLayer->getLayer() == layer) {
             return std::move(outputLayer);
         }
     }
+    return nullptr;
+}
 
-    return createOutputLayer(layer, layerFE);
+std::unique_ptr<compositionengine::OutputLayer> Output::getOrCreateOutputLayer(
+        std::shared_ptr<compositionengine::Layer> layer, sp<compositionengine::LayerFE> layerFE) {
+    auto result = takeOutputLayerForLayer(layer.get());
+    if (!result) {
+        result = createOutputLayer(layer, layerFE);
+    }
+    return result;
 }
 
 std::unique_ptr<compositionengine::OutputLayer> Output::createOutputLayer(
@@ -271,19 +305,18 @@
     return std::move(mReleasedLayers);
 }
 
-void Output::prepare(compositionengine::CompositionRefreshArgs& refreshArgs) {
-    if (CC_LIKELY(!refreshArgs.updatingGeometryThisFrame)) {
-        return;
-    }
+void Output::prepare(const compositionengine::CompositionRefreshArgs& refreshArgs,
+                     LayerFESet& geomSnapshots) {
+    ATRACE_CALL();
+    ALOGV(__FUNCTION__);
 
-    uint32_t zOrder = 0;
-    for (auto& layer : mOutputLayersOrderedByZ) {
-        // Assign a simple Z order sequence to each visible layer.
-        layer->editState().z = zOrder++;
-    }
+    rebuildLayerStacks(refreshArgs, geomSnapshots);
 }
 
 void Output::present(const compositionengine::CompositionRefreshArgs& refreshArgs) {
+    ATRACE_CALL();
+    ALOGV(__FUNCTION__);
+
     updateColorProfile(refreshArgs);
     updateAndWriteCompositionState(refreshArgs);
     setColorTransform(refreshArgs);
@@ -294,6 +327,249 @@
     postFramebuffer();
 }
 
+void Output::rebuildLayerStacks(const compositionengine::CompositionRefreshArgs& refreshArgs,
+                                LayerFESet& layerFESet) {
+    ATRACE_CALL();
+    ALOGV(__FUNCTION__);
+
+    // Do nothing if this output is not enabled or there is no need to perform this update
+    if (!mState.isEnabled || CC_LIKELY(!refreshArgs.updatingOutputGeometryThisFrame)) {
+        return;
+    }
+
+    // Process the layers to determine visibility and coverage
+    compositionengine::Output::CoverageState coverage{layerFESet};
+    collectVisibleLayers(refreshArgs, coverage);
+
+    // Compute the resulting coverage for this output, and store it for later
+    const ui::Transform& tr = mState.transform;
+    Region undefinedRegion{mState.bounds};
+    undefinedRegion.subtractSelf(tr.transform(coverage.aboveOpaqueLayers));
+
+    mState.undefinedRegion = undefinedRegion;
+    mState.dirtyRegion.orSelf(coverage.dirtyRegion);
+}
+
+void Output::collectVisibleLayers(const compositionengine::CompositionRefreshArgs& refreshArgs,
+                                  compositionengine::Output::CoverageState& coverage) {
+    // We build up a list of all layers that are going to be visible in the new
+    // frame.
+    compositionengine::Output::OutputLayers newLayersSortedByZ;
+
+    // Evaluate the layers from front to back to determine what is visible. This
+    // also incrementally calculates the coverage information for each layer as
+    // well as the entire output.
+    for (auto& layer : reversed(refreshArgs.layers)) {
+        // Incrementally process the coverage for each layer, obtaining an
+        // optional outputLayer if the layer is visible.
+        auto outputLayer = getOutputLayerIfVisible(layer, coverage);
+        if (outputLayer) {
+            newLayersSortedByZ.emplace_back(std::move(outputLayer));
+        }
+
+        // TODO(b/121291683): Stop early if the output is completely covered and
+        // no more layers could even be visible underneath the ones on top.
+    }
+
+    // Since we walked the layers in reverse order, we need to reverse
+    // newLayersSortedByZ to get the back-to-front ordered list of layers.
+    std::reverse(newLayersSortedByZ.begin(), newLayersSortedByZ.end());
+
+    // Generate a simple Z-order values to each visible output layer
+    uint32_t zOrder = 0;
+    for (auto& outputLayer : newLayersSortedByZ) {
+        outputLayer->editState().z = zOrder++;
+    }
+
+    setReleasedLayers(refreshArgs);
+
+    mOutputLayersOrderedByZ = std::move(newLayersSortedByZ);
+}
+
+std::unique_ptr<compositionengine::OutputLayer> Output::getOutputLayerIfVisible(
+        std::shared_ptr<compositionengine::Layer> layer,
+        compositionengine::Output::CoverageState& coverage) {
+    // Note: Converts a wp<LayerFE> to a sp<LayerFE>
+    auto layerFE = layer->getLayerFE();
+    if (layerFE == nullptr) {
+        return nullptr;
+    }
+
+    // Ensure we have a snapshot of the basic geometry layer state. Limit the
+    // snapshots to once per frame for each candidate layer, as layers may
+    // appear on multiple outputs.
+    if (!coverage.latchedLayers.count(layerFE)) {
+        coverage.latchedLayers.insert(layerFE);
+        layerFE->latchCompositionState(layer->editState().frontEnd,
+                                       compositionengine::LayerFE::StateSubset::BasicGeometry);
+    }
+
+    // Obtain a read-only reference to the front-end layer state
+    const auto& layerFEState = layer->getState().frontEnd;
+
+    // Only consider the layers on the given layer stack
+    if (!belongsInOutput(layer.get())) {
+        return nullptr;
+    }
+
+    /*
+     * opaqueRegion: area of a surface that is fully opaque.
+     */
+    Region opaqueRegion;
+
+    /*
+     * visibleRegion: area of a surface that is visible on screen and not fully
+     * transparent. This is essentially the layer's footprint minus the opaque
+     * regions above it. Areas covered by a translucent surface are considered
+     * visible.
+     */
+    Region visibleRegion;
+
+    /*
+     * coveredRegion: area of a surface that is covered by all visible regions
+     * above it (which includes the translucent areas).
+     */
+    Region coveredRegion;
+
+    /*
+     * transparentRegion: area of a surface that is hinted to be completely
+     * transparent. This is only used to tell when the layer has no visible non-
+     * transparent regions and can be removed from the layer list. It does not
+     * affect the visibleRegion of this layer or any layers beneath it. The hint
+     * may not be correct if apps don't respect the SurfaceView restrictions
+     * (which, sadly, some don't).
+     */
+    Region transparentRegion;
+
+    // handle hidden surfaces by setting the visible region to empty
+    if (CC_UNLIKELY(!layerFEState.isVisible)) {
+        return nullptr;
+    }
+
+    const ui::Transform& tr = layerFEState.geomLayerTransform;
+
+    // Get the visible region
+    // TODO(b/121291683): Is it worth creating helper methods on LayerFEState
+    // for computations like this?
+    visibleRegion.set(Rect(tr.transform(layerFEState.geomLayerBounds)));
+
+    if (visibleRegion.isEmpty()) {
+        return nullptr;
+    }
+
+    // Remove the transparent area from the visible region
+    if (!layerFEState.isOpaque) {
+        if (tr.preserveRects()) {
+            // transform the transparent region
+            transparentRegion = tr.transform(layerFEState.transparentRegionHint);
+        } else {
+            // transformation too complex, can't do the
+            // transparent region optimization.
+            transparentRegion.clear();
+        }
+    }
+
+    // compute the opaque region
+    const int32_t layerOrientation = tr.getOrientation();
+    if (layerFEState.isOpaque && ((layerOrientation & ui::Transform::ROT_INVALID) == 0)) {
+        // If we one of the simple category of transforms (0/90/180/270 rotation
+        // + any flip), then the opaque region is the layer's footprint.
+        // Otherwise we don't try and compute the opaque region since there may
+        // be errors at the edges, and we treat the entire layer as
+        // translucent.
+        opaqueRegion = visibleRegion;
+    }
+
+    // Clip the covered region to the visible region
+    coveredRegion = coverage.aboveCoveredLayers.intersect(visibleRegion);
+
+    // Update accumAboveCoveredLayers for next (lower) layer
+    coverage.aboveCoveredLayers.orSelf(visibleRegion);
+
+    // subtract the opaque region covered by the layers above us
+    visibleRegion.subtractSelf(coverage.aboveOpaqueLayers);
+
+    if (visibleRegion.isEmpty()) {
+        return nullptr;
+    }
+
+    // Get coverage information for the layer as previously displayed,
+    // also taking over ownership from mOutputLayersorderedByZ.
+    auto prevOutputLayer = takeOutputLayerForLayer(layer.get());
+
+    //  Get coverage information for the layer as previously displayed
+    // TODO(b/121291683): Define kEmptyRegion as a constant in Region.h
+    const Region kEmptyRegion;
+    const Region& oldVisibleRegion =
+            prevOutputLayer ? prevOutputLayer->getState().visibleRegion : kEmptyRegion;
+    const Region& oldCoveredRegion =
+            prevOutputLayer ? prevOutputLayer->getState().coveredRegion : kEmptyRegion;
+
+    // compute this layer's dirty region
+    Region dirty;
+    if (layerFEState.contentDirty) {
+        // we need to invalidate the whole region
+        dirty = visibleRegion;
+        // as well, as the old visible region
+        dirty.orSelf(oldVisibleRegion);
+    } else {
+        /* compute the exposed region:
+         *   the exposed region consists of two components:
+         *   1) what's VISIBLE now and was COVERED before
+         *   2) what's EXPOSED now less what was EXPOSED before
+         *
+         * note that (1) is conservative, we start with the whole visible region
+         * but only keep what used to be covered by something -- which mean it
+         * may have been exposed.
+         *
+         * (2) handles areas that were not covered by anything but got exposed
+         * because of a resize.
+         *
+         */
+        const Region newExposed = visibleRegion - coveredRegion;
+        const Region oldExposed = oldVisibleRegion - oldCoveredRegion;
+        dirty = (visibleRegion & oldCoveredRegion) | (newExposed - oldExposed);
+    }
+    dirty.subtractSelf(coverage.aboveOpaqueLayers);
+
+    // accumulate to the screen dirty region
+    coverage.dirtyRegion.orSelf(dirty);
+
+    // Update accumAboveOpaqueLayers for next (lower) layer
+    coverage.aboveOpaqueLayers.orSelf(opaqueRegion);
+
+    // Compute the visible non-transparent region
+    Region visibleNonTransparentRegion = visibleRegion.subtract(transparentRegion);
+
+    // Peform the final check to see if this layer is visible on this output
+    // TODO(b/121291683): Why does this not use visibleRegion? (see outputSpaceVisibleRegion below)
+    Region drawRegion(mState.transform.transform(visibleNonTransparentRegion));
+    drawRegion.andSelf(mState.bounds);
+    if (drawRegion.isEmpty()) {
+        return nullptr;
+    }
+
+    // The layer is visible. Either reuse the existing outputLayer if we have
+    // one, or create a new one if we do not.
+    std::unique_ptr<compositionengine::OutputLayer> result =
+            prevOutputLayer ? std::move(prevOutputLayer) : createOutputLayer(layer, layerFE);
+
+    // Store the layer coverage information into the layer state as some of it
+    // is useful later.
+    auto& outputLayerState = result->editState();
+    outputLayerState.visibleRegion = visibleRegion;
+    outputLayerState.visibleNonTransparentRegion = visibleNonTransparentRegion;
+    outputLayerState.coveredRegion = coveredRegion;
+    outputLayerState.outputSpaceVisibleRegion =
+            mState.transform.transform(outputLayerState.visibleRegion.intersect(mState.viewport));
+
+    return result;
+}
+
+void Output::setReleasedLayers(const compositionengine::CompositionRefreshArgs&) {
+    // The base class does nothing with this call.
+}
+
 void Output::updateLayerStateFromFE(const CompositionRefreshArgs& args) const {
     for (auto& layer : mOutputLayersOrderedByZ) {
         layer->getLayerFE().latchCompositionState(layer->getLayer().editState().frontEnd,
diff --git a/services/surfaceflinger/CompositionEngine/tests/DisplayTest.cpp b/services/surfaceflinger/CompositionEngine/tests/DisplayTest.cpp
index 6821ec1..74b3ada 100644
--- a/services/surfaceflinger/CompositionEngine/tests/DisplayTest.cpp
+++ b/services/surfaceflinger/CompositionEngine/tests/DisplayTest.cpp
@@ -277,6 +277,79 @@
 }
 
 /*
+ * Display::setReleasedLayers()
+ */
+
+TEST_F(DisplayTest, setReleasedLayersDoesNothingIfNotHwcDisplay) {
+    std::shared_ptr<impl::Display> nonHwcDisplay{
+            impl::createDisplay(mCompositionEngine, DisplayCreationArgsBuilder().build())};
+
+    sp<mock::LayerFE> layerXLayerFE = new StrictMock<mock::LayerFE>();
+    mock::Layer layerXLayer;
+
+    {
+        Output::ReleasedLayers releasedLayers;
+        releasedLayers.emplace_back(layerXLayerFE);
+        nonHwcDisplay->setReleasedLayers(std::move(releasedLayers));
+    }
+
+    CompositionRefreshArgs refreshArgs;
+    refreshArgs.layersWithQueuedFrames.push_back(&layerXLayer);
+
+    nonHwcDisplay->setReleasedLayers(refreshArgs);
+
+    const auto& releasedLayers = nonHwcDisplay->getReleasedLayersForTest();
+    ASSERT_EQ(1, releasedLayers.size());
+}
+
+TEST_F(DisplayTest, setReleasedLayersDoesNothingIfNoLayersWithQueuedFrames) {
+    sp<mock::LayerFE> layerXLayerFE = new StrictMock<mock::LayerFE>();
+
+    {
+        Output::ReleasedLayers releasedLayers;
+        releasedLayers.emplace_back(layerXLayerFE);
+        mDisplay.setReleasedLayers(std::move(releasedLayers));
+    }
+
+    CompositionRefreshArgs refreshArgs;
+    mDisplay.setReleasedLayers(refreshArgs);
+
+    const auto& releasedLayers = mDisplay.getReleasedLayersForTest();
+    ASSERT_EQ(1, releasedLayers.size());
+}
+
+TEST_F(DisplayTest, setReleasedLayers) {
+    sp<mock::LayerFE> layer1LayerFE = new StrictMock<mock::LayerFE>();
+    sp<mock::LayerFE> layer2LayerFE = new StrictMock<mock::LayerFE>();
+    sp<mock::LayerFE> layer3LayerFE = new StrictMock<mock::LayerFE>();
+    sp<mock::LayerFE> layerXLayerFE = new StrictMock<mock::LayerFE>();
+    mock::Layer layer1Layer;
+    mock::Layer layer2Layer;
+    mock::Layer layer3Layer;
+    mock::Layer layerXLayer;
+
+    EXPECT_CALL(*mLayer1, getLayer()).WillRepeatedly(ReturnRef(layer1Layer));
+    EXPECT_CALL(*mLayer1, getLayerFE()).WillRepeatedly(ReturnRef(*layer1LayerFE.get()));
+    EXPECT_CALL(*mLayer2, getLayer()).WillRepeatedly(ReturnRef(layer2Layer));
+    EXPECT_CALL(*mLayer2, getLayerFE()).WillRepeatedly(ReturnRef(*layer2LayerFE.get()));
+    EXPECT_CALL(*mLayer3, getLayer()).WillRepeatedly(ReturnRef(layer3Layer));
+    EXPECT_CALL(*mLayer3, getLayerFE()).WillRepeatedly(ReturnRef(*layer3LayerFE.get()));
+
+    CompositionRefreshArgs refreshArgs;
+    refreshArgs.layersWithQueuedFrames.push_back(&layer1Layer);
+    refreshArgs.layersWithQueuedFrames.push_back(&layer2Layer);
+    refreshArgs.layersWithQueuedFrames.push_back(&layerXLayer);
+    refreshArgs.layersWithQueuedFrames.push_back(nullptr);
+
+    mDisplay.setReleasedLayers(refreshArgs);
+
+    const auto& releasedLayers = mDisplay.getReleasedLayersForTest();
+    ASSERT_EQ(2, releasedLayers.size());
+    ASSERT_EQ(layer1LayerFE.get(), releasedLayers[0].promote().get());
+    ASSERT_EQ(layer2LayerFE.get(), releasedLayers[1].promote().get());
+}
+
+/*
  * Display::chooseCompositionStrategy()
  */