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Contract Costs | 12 Months Ended
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Dec. 31, 2025
Contract Costs |
Contract Costs | 10. Contract Costs For our contract operations segment, we capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized contract costs include commissions paid to our sales force to obtain contract operations contracts. We expense commissions paid for sales of service contracts and OTC parts and components within our aftermarket services segment, as the amortization period is less than one year. We had contract costs of $3.1 million and $4.1 million associated with sales commissions recorded in our consolidated balance sheets as of December 31, 2025 and 2024, respectively. For our contract operations segment, we capitalize costs incurred to fulfill a contract if those costs relate directly to a contract, enhance resources that we will use in satisfying performance obligations and if we expect to recover those costs. Contract costs incurred to fulfill our customer contracts include freight charges to transport compression assets before transferring services to the customer and mobilization activities associated with our contract operations services. Aftermarket services fulfillment costs are recognized based on the percentage–of–completion method applicable to the customer contract and do not typically result in the recognition of a contract asset. We had contract costs of $20.2 million and $19.8 million associated with freight and mobilization recorded in our consolidated balance sheets as of December 31, 2025 and 2024, respectively. Contract operations costs to obtain and fulfill a contract are amortized based on the transfer of service to which the assets relate, which is estimated based on the average contract term, including anticipated renewals. Annually, we assess whether the estimate fairly represents the average contract term and adjust as appropriate. Contract costs associated with commissions are amortized to SG&A. Contract costs associated with freight and mobilization are amortized to cost of sales, exclusive of depreciation and amortization. During the years ended December 31, 2025, 2024 and 2023, we amortized $2.8 million, $2.3 million and $1.9 million, respectively, related to sales commissions, and $19.3 million, $21.5 million and $19.4 million, respectively, related to freight and mobilization.

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- Definition Disclosure of cost capitalized in obtaining or fulfilling contract with customer. + References No definition available. + Details
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- References No definition available. + Details
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