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14) Revenues From Contracts With Customers

3 Months Ended

Mar. 31, 2018

14) Revenues From Contracts With Customers

14) Revenues from Contracts with Customers

See Note 2 regarding the adoption of ASU No. 2014-09. The Company’s cemetery and mortuary revenues are the only revenues recognized from contracts with customers, thus they are the only revenues subject to ASU No. 2014-09.

Pre-need contract sales of funeral services and caskets - revenue and costs associated with the sales of pre-need funeral services and caskets are deferred until the services are performed or the caskets are delivered.

Sales of cemetery interment rights (cemetery burial property) - revenue and costs associated with the sale of cemetery interment rights are recognized in accordance with the retail land sales provisions based on GAAP. Under GAAP, recognition of revenue and associated costs from constructed cemetery property must be deferred until 10% of the sales price has been collected.

Pre-need contract sales of cemetery merchandise (primarily markers and vaults) - revenue and costs associated with the sale of pre-need cemetery merchandise is deferred until the merchandise is delivered.

Pre-need contract sales of cemetery services (primarily merchandise delivery and installation fees) - revenue and costs associated with the sales of pre-need cemetery services are deferred until the services are performed.

Prearranged funeral and pre-need cemetery customer acquisition costs - costs incurred related to obtaining new pre-need contract cemetery and prearranged funeral services are accounted for under the guidance of the provisions based on GAAP. Obtaining costs, which include only costs that vary with and are primarily related to the acquisition of new pre-need cemetery and prearranged funeral services, are deferred until the merchandise is delivered or services are performed.

Revenues and costs for at need sales are recorded when a valid contract exists, the services are performed, collection is reasonably assured and there are no significant obligations remaining.

The following table disaggregates revenue for the Company’s cemetery and mortuary contracts.

	Three Months Ended March 31
	2018
Major goods/service lines
At-need	$ 2,737,625
Pre-need	495,104
	$ 3,232,729

Timing of Revenue Recognition
Goods transferred at a point in time	$ 2,072,481
Services transferred at a point in time	1,160,248
	$ 3,232,729

The following table reconciles revenues from cemetery and mortuary contracts to Note 7 – Business Segment Information for the three months ended March 31, 2018:

	Cemetery/Mortuary Segment
Net mortuary and cemetery sales	$ 3,232,729
Gains on investments and other assets	409,088
Net investment income	88,078
Other revenues	45,850
Revenues from external customers	3,775,745

The opening and closing balances of the Company’s receivables, contract assets and contract liabilities are as follows:

	Contract Balances
	Receivables (1)	Contract Asset (2)	Contract Liability (2)
Opening (1/1/2018)	$ 2,742,765	$ 856,479	$ 13,729,547
Closing (3/31/2018)	2,595,611	731,626	12,882,550
Increase/(decrease)	(147,154)	(124,853)	(846,997)

(1) Included in Receivables, net on the condensed consolidated balance sheets
(2) The contract asset and liability are netted together in Deferred pre-need cemetery and mortuary contract revenues on the condensed consolidated balance sheets.

The amount of revenue recognized for the three months ended March 31, 2018 that was included in the opening contract liability balance was $724,771.

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment.