3. 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 tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):


	Fiscal Quarter Ended
	March 28,		March 30,
Type of Contract	2020		2019
Consulting services revenues
Fixed Price	$	28,988	$	21,386
Time-and-materials		97,170		84,463
Total	$	126,158	$	105,849


	Fiscal Quarter Ended
	March 28,		March 30,
Geographic Breakdown	2020		2019
Consulting services revenues
United States	$	100,740	$	83,529
United Kingdom		19,066		18,507
Other		6,352		3,813
Total	$	126,158	$	105,849

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. Variable consideration reserves are based on actual price concessions and those expected to be extended to CRA customers as well as CRA's historical realization rates and are recorded as a component of the allowances for accounts receivable and unbilled services.

CRA’s accounts receivable and unbilled services consist of receivables from a broad range of clients in a variety of industries located through the U.S. and 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.

CRA adopted ASC 326 on December 29, 2019, which changed the method CRA estimated reserves related to credit risk. As a result of the adoption, CRA recognized a cumulative-effect adjustment of $0.2 million to retained earnings and allowances for accounts receivable and unbilled services. Comparative periods and their respective disclosures prior to the adoption of ASC 326 have not been adjusted.

Under ASC 326, CRA maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. CRA estimates these allowances based on historical charge-off rates, adjusted for days of sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. CRA writes off allowances when management determines the balance is uncollectible and all efforts of collection have been exhausted. Bad debt expense, net of recoveries of previously written off allowances, is reported as a component of selling, general and administrative expenses.

Prior to adopting ASC 326 in fiscal 2020, CRA determined allowances for accounts receivable and unbilled services for specific customer accounts based on the financial condition of the customer and related facts and circumstances. Expenses associated with these allowances were reported as a component of selling, general and administrative expenses.

Adjustments to the allowances for accounts receivable and unbilled services related to reserves for variable consideration are as follows (in thousands):

Adjustments to the allowances for accounts receivable and unbilled services related to reserves for credit risk are as follows (in thousands):


	Fiscal Quarter Ended		Fiscal Year Ended
	March 28, 2020		December 28, 2019
Beginning balance	$	370	$	639
Cumulative effect of a change in accounting principle related to ASC 326		203		—
Bad debt expense		59		173
Amounts written off		(138)		(442)
Ending balance	$	494	$	370

Reimbursable Expenses

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):

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 March 28, 2020 and December 28, 2019.

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 performance obligations have been satisfied 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 Quarter Ended		Fiscal Year Ended
	March 28,		December 28,
	2020		2019
Balance at the beginning of the period	$	4,007	$	5,453
Balance at the end of the period	$	3,495	$	4,007

During the fiscal quarter ended March 28, 2020, CRA recognized the following revenue as a result of changes in the contract liability balance or performance obligations satisfied in previous years (in thousands):


	Fiscal Quarter Ended
	March 28,
	2020
Amounts included in contract liabilities at the beginning of the period	$	2,906
Performance obligations satisfied in previous periods	$	3,257

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

Fiscal Quarter Ended

Additions to reserves for variable consideration