REVENUE RECOGNITION

9 Months Ended

May 31, 2020

Revenue from Contract with Customer [Abstract]

NOTE 4. REVENUE RECOGNITION

In the Americas Mills, Americas Recycling and International Mill segments, revenue is recognized at a point in time concurrent with the transfer of control, which usually occurs, depending on shipping terms, upon shipment or customer receipt.

In the Americas Fabrication segment, each contract represents a single performance obligation. Revenue is either recognized over time or equal to billing under an available practical expedient. For contracts where the Company provides fabricated product and installation services, revenue is recognized over time using an input method. For the three and nine months ended May 31, 2020, these contracts represented approximately 23% and 25%, respectively, of net sales in the Americas Fabrication segment. For these contracts, the measure of progress is based on contract costs incurred to date compared to total estimated contract costs, which provides a reasonable depiction of the Company’s progress towards satisfaction of the performance obligation as there is a direct relationship between costs incurred by the Company and the transfer of the fabricated product and installation services. Revenue from contracts where the Company does not provide installation services is recognized over time using an output method. For the three and nine months ended May 31, 2020, these contracts represented approximately 25% of net sales in the Americas Fabrication segment. For these contracts, the Company uses tons shipped compared to total estimated tons, which provides a reasonable depiction of the transfer of contract value to the customer, as there is a direct relationship between the units shipped by the Company and the transfer of the fabricated product. Significant judgment is required to evaluate total estimated costs used in the input method and total estimated tons in the output method. If estimated total consolidated costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues, costs to complete or total planned quantity is recorded in the period in which such revisions are identified. The Company does not exercise significant judgment in determining the transaction price. For the three and nine months ended May 31, 2020, the remaining 52% and 50%, respectively, of net sales in the Americas Fabrication segment was recognized as amounts were billed to the customer.

Payment terms and conditions vary by contract type, although the Company generally requires customers to pay within 30 days of invoice date. The timing of revenue recognition for certain Americas Fabrication contracts, as described above, differs from the timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing and a liability when revenue is recognized after invoicing. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined the contracts do not include a significant financing component.

The following table provides information about assets and liabilities from contracts with customers.


(in thousands)	May 31, 2020		August 31, 2019
Contract assets (included in accounts receivable)	$	55,687	$	103,805
Contract liabilities (included in accrued expenses and other payables)	21,900		37,165

The entire contract liability as of August 31, 2019 was recognized in the nine months ended May 31, 2020.

Remaining Performance Obligations

As of May 31, 2020, $732.3 million has been allocated to remaining performance obligations in the Americas Fabrication segment, excluding those contracts where revenue is recognized equal to billing. Of this amount, the Company estimates the remaining performance obligations will be recognized as revenue after May 31, 2020 as follows: 40% in the first twelve months, 48% in the following twelve months, and 12% thereafter. The duration of contracts in the Americas Mills, Americas Recycling and International Mill segments are typically less than one year.

Disaggregation of Revenue

The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.


	Three Months Ended May 31, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	204	$	420,169	$	494,519	$	165,626	$	—	$	1,080,518
Ferrous scrap	63,735		8,698		—		61		—		72,494
Nonferrous scrap	83,650		3,091		—		2,438		—		89,179
Construction materials	—		—		72,637		—		—		72,637
Other	432		19,320		626		5,340		1,137		26,855
Total	$	148,021	$	451,278	$	567,782	$	173,465	$	1,137	$	1,341,683

	Nine Months Ended May 31, 2020
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	459	$	1,298,980	$	1,436,011	$	494,853	$	—	$	3,230,303
Ferrous scrap	188,077		26,320		1		432		—		214,830
Nonferrous scrap	309,730		9,981		—		6,680		—		326,391
Construction materials	—		—		206,225		—		—		206,225
Other	1,441		61,556		6,303		16,196		4,109		89,605
Total	$	499,707	$	1,396,837	$	1,648,540	$	518,161	$	4,109	$	4,067,354


	Three Months Ended May 31, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	238	$	501,925	$	554,672	$	199,431	$	—	$	1,256,266
Ferrous scrap	106,404		8,916		2		525		—		115,847
Nonferrous scrap	121,581		4,080		—		3,212		—		128,873
Construction materials	—		—		71,228		—		—		71,228
Other	563		21,114		3,608		5,854		2,519		33,658
Total	$	228,786	$	536,035	$	629,510	$	209,022	$	2,519	$	1,605,872

	Nine Months Ended May 31, 2019
(in thousands)	Americas Recycling		Americas Mills		Americas Fabrication		International Mill		Corporate and Other		Total
Steel products	$	679	$	1,294,217	$	1,392,442	$	584,735	$	—	$	3,272,073
Ferrous scrap	323,311		26,802		2		1,055		—		351,170
Nonferrous scrap	369,660		10,568		—		8,677		—		388,905
Construction materials	—		—		188,589		—		—		188,589
Other	1,205		50,914		9,713		16,173		7,255		85,260
Total	$	694,855	$	1,382,501	$	1,590,746	$	610,640	$	7,255	$	4,285,997