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Revenues from Contracts with Customers
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenues from Contracts with Customers

13) Revenues from Contracts with Customers

 

The Company reports revenues from contracts with customers pursuant to ASC No. 606, Revenue from Contracts with Customers.

 

Information about Performance Obligations and Contract Balances

 

The Company’s cemetery and mortuary segment sells a variety of goods and services to customers in both at-need and pre-need situations. Due to the timing of the fulfillment of the obligation, revenue is deferred until that obligation is fulfilled.

 

The Company’s two types of future obligations are as follows:

 

Pre-need Merchandise and Service Revenue: All pre-need merchandise and service revenue are deferred, and the funds are placed in trust until the need arises; the merchandise is received, or the service is performed. The trust is then relieved, and the revenue and commissions are recognized. Pre-need contracts are required to be paid in full prior to a customer using a good or service from a pre-need contract. Goods and services from pre-need contracts can be transferred when paid in full from one owner to another. In such cases, the Company will act as an agent in transferring the requested goods and services. The transfer of goods and services does not fulfill the contract and revenue remains deferred.

 

At-need Specialty Merchandise Revenue: At-need specialty merchandise revenue consists of customizable merchandise ordered from manufacturers such as markers and bases. When specialty merchandise is ordered, it can take time to manufacture and deliver the product. Revenue is deferred until the at-need merchandise is received.

 

Complete payment does not constitute fulfillment of the contract. Goods or services are deferred until such a time the service is performed, or merchandise is received.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)

 

13) Revenues from Contracts with Customers (Continued)

 

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

 

Schedule of Opening and Closing Balances of Receivables, Contract Assets and Contract Liabilities 

   Contract Balances 
   Receivables (1)   Contract Asset  

Contract

Liability

 
Opening (December 31, 2024)  $7,095,589   $-   $20,168,405 
Closing (September 30, 2025)   6,797,943            -    22,234,892 
Increase/(decrease)   (297,646)   -    2,066,487 

 

   Contract Balances 
   Receivables (1)   Contract Asset  

Contract

Liability

 
Opening (December 31, 2023)  $6,321,573   $-   $18,237,246 
Closing (December 31, 2024)   7,095,589           -    20,168,405 
Increase/(decrease)   774,016    -    1,931,159 

 

 

(1) Included in Receivables, net on the condensed consolidated balance sheets

 

The amount of revenue recognized and included in the opening contract liability balance for the three-month periods ended September 30, 2025, and 2024 was $1,326,702 and $1,320,688, respectively, and for the nine-month periods ended September 30, 2025, and 2024 was $3,650,091 and $4,256,184, respectively.

 

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.

 

Disaggregation of Revenue

 

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

 

Schedule of Revenues of the Cemetery and Mortuary Contracts 

   2025   2024   2025   2024 
  

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2025   2024   2025   2024 
Major goods/service lines                    
At-need  $5,441,670   $5,024,330   $16,241,736   $15,299,010 
Pre-need   1,699,272    1,790,001    5,457,144    6,232,759 
Net mortuary and cemetery sales  $7,140,942   $6,814,331   $21,698,880   $21,531,769 
                     
Timing of Revenue Recognition                    
Goods transferred at a point in time  $4,384,201   $4,064,864   $13,381,830   $13,287,515 
Services transferred at a point in time   2,756,741    2,749,467    8,317,050    8,244,254 
Net mortuary and cemetery sales   $7,140,942   $6,814,331   $21,698,880   $21,531,769 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025 (Unaudited)