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Revenue Recognition | 6 Months Ended
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Jun. 27, 2020
Revenue Recognition |
Revenue Recognition | 3. Revenue Recognition The contracts CRA enters into and operates under specify whether the projects 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 project, 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 Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | June 29, | ​ | June 27, | ​ | June 29,
Type of Contract |  | 2020 |  | 2019 |  | 2020 |  | 2019
Consulting services revenues: | ​ | ​ | ​ |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​
Fixed Price | ​ | $ | 30,783 | ​ | $ | 25,179 | ​ | $ | 59,771 | ​ | $ | 46,565
Time-and-materials | ​ |  | 92,248 | ​ |  | 85,394 | ​ | ​ | 189,418 | ​ | ​ | 169,857
Total | ​ | $ | 123,031 | ​ | $ | 110,573 | ​ | $ | 249,189 | ​ | $ | 216,422
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Fiscal Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | June 29, | ​ | June 27, | ​ | June 29,
Geographic Breakdown |  | 2020 |  | 2019 |  | 2020 |  | 2019
Consulting services revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
United States |  | $ | 99,416 |  | $ | 87,475 | ​ | $ | 200,156 | ​ | $ | 171,004
United Kingdom | ​ | ​ | 17,931 | ​ | ​ | 17,404 | ​ | ​ | 36,997 | ​ | ​ | 35,911
Other | ​ | ​ | 5,684 | ​ | ​ | 5,694 | ​ | ​ | 12,036 | ​ | ​ | 9,507
Total |  | $ | 123,031 | ​ | $ | 110,573 | ​ | $ | 249,189 | ​ | $ | 216,422
​ 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 utilizes to estimate 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 on the condensed consolidated statements of operations. 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 on the condensed consolidated statements of operations. Additions to the allowances for accounts receivable and unbilled services related to reserves for variable consideration are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fiscal Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | June 29, | ​ | June 27, | ​ | June 29,
​ |  | 2020 |  | 2019 |  | 2020 |  | 2019
Additions to reserves for variable consideration | ​ | $ | 1,705 | ​ | $ | 2,725 | ​ | $ | 3,119 | ​ | $ | 4,158
​ Adjustments to the allowances for accounts receivable and unbilled services related to reserves for credit risk are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fiscal Year-to-Date |  | ​ | ​
​ | ​ | Period Ended | ​ | Fiscal Year Ended
​ | ​ | June 27, 2020 | ​ | December 28, 2019
Beginning balance | ​ | $ | 370 | ​ | $ | 639
Cumulative effect of a change in accounting principle related to ASC 326 | ​ |  | 203 | ​ |  | —
Provision for credit loss expense, net of recoveries | ​ | ​ | (43) | ​ | ​ | 173
Amounts written off | ​ |  | (138) | ​ |  | (442)
Ending balance | ​ | $ | 392 | ​ | $ | 370
​ The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  | ​ |  |  | ​ |  | Fiscal Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | June 29, | ​ | June 27, | ​ | June 29,
​ |  | 2020 |  | 2019 |  | 2020 |  | 2019
Bad debt expense (recovery), net | ​ | $ | (102) | ​ | $ | 48 | ​ | $ | (43) | ​ | $ | 31
​ 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): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Fiscal Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | June 29, | ​ | June 27, | ​ | June 29,
​ |  | 2020 |  | 2019 |  | 2020 |  | 2019
Reimbursable expenses | ​ | $ | 14,815 | ​ | $ | 12,178 | ​ | $ | 31,245 | ​ | $ | 25,013
​ 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 June 27, 2020 and December 28, 2019. The timing of revenue recognition, billings, and cash collections results in billed receivables, unbilled services and contract liabilities on the condensed consolidated balance sheet. 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. Contract liabilities are included in deferred revenue and other liabilities on the condensed consolidated balance sheet. The following table presents the closing balances of CRA’s contract liabilities (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 27, 2020 | ​ | December 28, 2019
Balance at the end of the period | ​ | $ | 2,775 | ​ | $ | 4,007
​ CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fiscal Year-to-Date
​ | ​ | Fiscal Quarter Ended | ​ | Period Ended
​ | ​ | June 27, | ​ | ​ | June 29, | ​ | June 27, | ​ | ​ | June 29,
​ |  | 2020 | ​ | ​ | 2019 |  | 2020 | ​ | ​ | 2019
Revenue recognized for amounts included in contract liabilities at the beginning of the period | ​ | $ | 2,940 | ​ | $ | 2,560 | ​ | $ | 3,250 | ​ | $ | 4,631
Revenue recognized for performance obligations satisfied in previous periods | ​ | $ | 3,554 | ​ | $ | 5,691 | ​ | $ | 4,075 | ​ | $ | 3,590
​

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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