2. Revenue Recognition

The contracts CRA enters into and operates under specify whether the engagements are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement plus all direct expenses incurred to complete the engagement, including any amounts billed to CRA by its non-employee experts.

Disaggregation of Revenue

The following table disaggregates CRA’s revenue by major business line and timing of transfer of its consulting services.


	Year Ended		Year Ended		Year Ended
	December 28,		December 29,		December 30,
	2019		2018		2017
Type of Contract	(52 weeks)		(52 weeks)		(52 weeks) (1)
Consulting services revenues
Fixed Price	$	107,344	$	95,096	$	93,570
Time-and-materials		344,026		322,552		276,505
Total	$	451,370	$	417,648	$	370,075


	Year Ended		Year Ended		Year Ended
	December 28,		December 29,		December 30,
	2019		2018		2017
Geographic Breakdown	(52 weeks)		(52 weeks)		(52 weeks) (1)
Consulting services revenues
United States	$	357,156	$	329,678	$	295,232
United Kingdom		72,169		65,874		53,644
Other		22,045		22,096		21,199
Total	$	451,370	$	417,648	$	370,075

(1)

As a result of the adoption of ASC 606 on December 31, 2017 under the modified retrospective method, prior period amounts have not been adjusted.

Reserves for Variable Consideration and Credit Risk

Revenues from CRA’s consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. These calculated estimates take into consideration CRA’s historical realization rates. Specific reserves for accounts receivable and unbilled services are a component of variable consideration.

CRA's accounts receivable and unbilled services consist of receivables from a broad range of clients in a variety of industries located throughout the U.S. and in other countries. CRA performs a credit evaluation of its clients to minimize its collectability risk. Periodically, CRA will require advance payment from certain clients. However, CRA does not require collateral or other security.

A rollforward of the variable consideration and allowances for accounts receivable, which includes an allowance for doubtful accounts of $0.4 million and $0.7 million as of December 28, 2019 and December 29, 2018, respectively, is as follows (in thousands):


	Fiscal		Fiscal
	Year		Year
	2019		2018
Balance at beginning of year	$	3,764	$	5,252
Increases to reserves		2,926		3,675
Amounts written off		(2,866)		(5,173)
Effects of foreign currency translation		14		10
Balance at end of year	$	3,838	$	3,764

A rollforward of the variable consideration and allowances for unbilled services is as follows (in thousands):


	Fiscal		Fiscal
	Year		Year
	2019		2018
Balance at beginning of year	$	415	$	704
Increases to reserves		5,548		4,755
Amounts written off		(4,467)		(5,042)
Effects of foreign currency translation		7		(2)
Balance at end of year	$	1,503	$	415

Bad debt expense is reported as a component of selling, general and administrative expenses related to credit-related losses. Bad debt expense is as follows (in thousands):


	Year Ended		Year Ended		Year Ended
	December 28,		December 29,		December 30,
	2019		2018		2017
	(52 weeks)		(52 weeks)		(52 weeks)
Bad debt expense	$	173	$	1,237	$	—

Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):


	Year Ended		Year Ended		Year Ended
	December 28,		December 29,		December 30,
	2019		2018		2017
	(52 weeks)		(52 weeks)		(52 weeks)
Reimbursable expenses	$	54,871	$	48,817	$	41,465

Contract Balances from Contracts with Customers

CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance based or contingent fee, but is not yet entitled to receive a fee, because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of December 28, 2019 and December 29, 2018.

CRA defines contract liabilities as advance payments from or billings to its clients for services that have not yet been performed or earned and retainers. These liabilities are recorded within deferred revenues and are recognized as services are provided. When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the consulting services are transferred to the customer and all revenue recognition criteria have been met.

The following table presents the opening and closing balances of CRA’s contract liability (in thousands):


	Contract Liability
	Fiscal Year		Fiscal Year
	2019		2018
Balance at the beginning of the period	$	5,453	$	3,287
Balance at the end of the period	$	4,007	$	5,453

During the year ended December 28, 2019, CRA recognized the following revenue as a result of changes in the contract liability balance or performance obligations satisfied in previous years (in thousands):


	Year Ended		Year Ended
	December 28,		December 29,
	2019		2018
	(52 weeks)		(52 weeks)
Amounts included in contract liabilities at the beginning of the year	$	5,155	$	3,149
Performance obligations satisfied in previous years	$	3,603	$	3,346

The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled services and contract liabilities on the condensed consolidated balance sheets.