XML 28 R17.htm IDEA: XBRL DOCUMENT

CONTRACT ASSETS AND LIABILITIES

9 Months Ended

Sep. 26, 2020

10. CONTRACT ASSETS AND LIABILITIES

Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized from customer arrangements, including licensing, exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. The Company classifies the noncurrent portion of contract assets under other assets in its condensed consolidated balance sheets.

Contract liabilities consist of advance payments and billings in excess of cost incurred and deferred revenue.

Net contract assets (liabilities) consisted of the following:

	September 26, 2020			December 28, 2019		$ Change		% Change
Contract assets —current	$	1,584,171		$	921,082	$	663,089		72%
Contract liabilities—current		(576,419	)		(796,794)		220,375		(28)%
Contract liabilities—noncurrent		(2,350	)		(6,557)		4,207		(64)%
Net contract assets	$	1,005,402		$	117,731	$	887,671		754%

The $0.9 million increase in the Company’s net contract assets at September 26, 2020 as compared to December 28, 2019 was primarily due to an increase in inventory and other costs associated with government contracts which recognize revenue over time, and a decrease in billing in excess of revenue earned.

In the three and nine months ended September 26, 2020, the Company recognized revenue of less than $0.1 million and $0.6 million, respectively, related to our contract liabilities at December 28, 2019. In the three and nine months ended September 28, 2019, the Company recognized revenue of $0.1 million and $0.3 million, respectively, related to our contract liabilities at December 29, 2018.

The Company did not recognize impairment losses on our contract assets in the three and nine months ended September 26, 2020 or September 28, 2019.

Performance Obligations

The Company’s revenue recognition related to performance obligations that were satisfied at a point in time and over time were as follows:

	Three Months Ended						Nine Months Ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
Point in time		34	%		55	%		36	%		72	%
Over time		66	%		45	%		64	%		28	%

Remaining performance obligations represent the transaction price of orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (“IDIQ”)). As of September 26, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $25.8 million which the Company expects to recognize over the next 15 months. The remaining performance obligations represent amounts to be earned under government contracts, which are subject to cancellation.