CONTRACT ASSETS and CONTRACT LIABILITIES

6 Months Ended

Sep. 30, 2018

CONTRACT ASSETS and CONTRACT LIABILITIES [Abstract]

CONTRACT ASSETS and CONTRACT LIABILITIES

NOTE 5 – CONTRACT ASSETS and CONTRACT LIABILITIES

Contract assets primarily relate to the Company's rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time. Fixed-price contracts are generally billed to the customer using either progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance-based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Contract liabilities relate to advance payments, billings in excess of revenues, and deferred revenue amounts. We also receive deposits representing down payments for acquisition of materials.

Revenue recognized over time gives rise to contract assets, which represent revenue recognized but unbilled.  Contract assets are included in the condensed consolidated balance sheets as a component of current assets. The $3.5 million increase in contract assets from April 1, 2018 to September 30, 2018 is due primarily to the Company’s change in accounting policy (see Note 2) and transition from a units-of-delivery revenue recognition policy to a model that recognizes revenue over time as asset ownership is transferred to the customer. Our contract liabilities increased by $1.5 million primarily due to an increase in customer deposits and milestone payments in connection with new projects started since March 31, 2018.