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Note 3 - Revenue From Contracts With Customers
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3.

Revenue from contracts with customers

 

Disaggregated revenues are as follows:

 

  

Year ended

 
  

December 31

 
  

2023

  

2022

 

Revenues

        

FirstService Residential

 $1,996,823  $1,772,258 

FirstService Brands company-owned operations

  2,122,691   1,773,446 

FirstService Brands franchisor

  208,704   195,299 

FirstService Brands franchise fee

  6,330   4,832 

 

The Company disaggregates revenue by segment. Within the FirstService Brands segment, the Company further disaggregates its company-owned operations revenue; these businesses primarily recognize revenue over time as they perform because of continuous transfer of control to the customer. As such, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses the percentage of completion method.

 

We believe this disaggregation best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors.

 

The Company’s backlog represents remaining performance obligations and is defined as contracted work yet to be performed. As at December 31, 2023, the aggregate amount of backlog was $838,335 (2022 - $631,660). The Company expects to recognize revenue on the majority of the remaining backlog over the next 12 months.

 

Within the FirstService Brands segment, franchise fee revenue recognized during the twelve months ended December 31, 2023 that was included in unearned revenues at the beginning of the period was $5,752 (2022 - $4,649). These fees are recognized over the life of the underlying franchise agreement, usually between 5 - 10 years.

 

The majority of current unearned revenues as at December 31, 2022 was recognized into income during 2023.

 

External broker costs and employee sales commissions in obtaining new franchisees are capitalized in accordance with the revenue standard and are amortized over the life of the underlying franchise agreement. Costs amortized during the twelve months ended December 31, 2023 were $2,817 (2022 - $2,014). The closing amount of the capitalized costs to obtain contracts on the balance sheet as at December 31, 2023 was $11,610 (2022 - $8,802). There were no impairment losses recognized related to those assets in the year.