COSTS INCURRED ON UNCOMPLETED CONTRACTS

3 Months Ended

Jun. 30, 2014

COSTS INCURRED ON UNCOMPLETED CONTRACTS

COSTS INCURRED ON UNCOMPLETED CONTRACTS

NOTE 5 — COSTS INCURRED ON UNCOMPLETED CONTRACTS

	June 30, 2014			March 31, 2014
Cost incurred on uncompleted contracts, beginning balance	$	9,960,072		$	6,180,839
Total cost incurred on contracts during the period	4,213,134			25,579,089
Less cost of sales, during the period	(6,012,101		)	(21,799,856		)
Cost incurred on uncompleted contracts, ending balance	$	8,161,105		$	9,960,072
Billings on uncompleted contracts, beginning balance	$	4,702,070		$	1,882,546
Plus: Total billings incurred on contracts, during the period	4,993,338			23,887,587
Less: Contracts recognized as revenue, during the period	(6,230,341		)	(21,068,063		)
Billings on uncompleted contracts, ending balance	$	3,465,067		$	4,702,070
Cost incurred on uncompleted contracts, ending balance	$	8,161,105		$	9,960,072
Billings on uncompleted contracts, ending balance	3,465,067			4,702,070
Costs incurred on uncompleted contracts, in excess of progress billings	$	4,696,038		$	5,258,002

Contract costs consist primarily of labor and materials and related overhead, to the extent that such costs are recoverable. Revenues associated with these contracts are recorded only when the amount of recovery can be estimated reliably and realization is probable. As of June 30, 2014 and March 31, 2014, we had deferred revenues totaling $651,923 and $1,461,689, respectively. Deferred revenues represent customer prepayments on their contracts and completed contracts on which all revenue recognition criteria were not met. We record provisions for losses within costs of sales in our condensed consolidated statement of operations and comprehensive loss. We also receive advance billings and deposits representing down payments for acquisition of materials and progress payments on contracts. The contracts with our customers allow us to offset the progress payments against the costs incurred.