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CONTRACT ASSETS AND CONTRACT LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule of net contract assets (liabilities)

9.	Contract assets and contract liabilities

Net contract assets consist of the following:

	June 30, 2019
	U.S.
	Government			Commercial			Total
Contract assets	$	50,056,686		$	70,197,693		$	120,254,379
Contract liabilities		(3,486,110	)		(2,713	)		(3,488,823	)
Net contract assets	$	46,570,576		$	70,194,980		$	116,765,556

	December 31, 2018
	U.S.
	Government			Commercial			Total
Contract assets	$	48,358,481		$	64,975,010		$	113,333,491
Contract liabilities		(3,780,866	)		(24,240	)		(3,805,106	)
Net contract assets	$	44,577,615		$	64,950,770		$	109,528,385

The increase in the Company’s net contract assets from January 1, 2019 to June 30, 2019 was primarily due to costs incurred on newer programs, such as the new design of the HondaJet engine inlet ($1.5 million increase), for which the Company has not begun billing on a steady rate and the Raytheon Next Generation Jammer pod 2.0 ($5.0 million increase). Additionally, contract assets on the Company’s F-35 Lock Assembly program increased $0.9 million. This has been partially offset by a decrease in contract assets on our E-2D program ($3.5 million decrease) which is shipping on a regular schedule.

U.S. government contracts includes contracts directly with the U.S. government and government subcontractors.

Revisions in the estimated gross profits on contracts and contract amounts are made in the period in which the circumstances requiring the revisions occur. During the six months ended June 30, 2019, the effect of such revisions in total estimated contract profits resulted in an increase to the total gross profit to be earned on the contracts of approximately $326,000 from that which would have been reported had the revised estimates been used as the basis of recognition of contract profits in prior years. During the six months ended June 30, 2018, the effect of such revisions was a decrease to total gross profit of approximately $275,000.

Although management believes it has established adequate procedures for estimating costs to uncompleted open contracts, it is possible that additional significant costs could occur on contracts prior to completion.