NOTE 3 - CONTRACT ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2021

Notes

NOTE 3 - CONTRACT ASSETS AND LIABILITIES

NOTE 3 – CONTRACT ASSETS AND LIABILITIES

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities).

The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates:

	December 31,		December 31,
	2021		2020
Contract assets	$	13,221	$	13,221
Contract liabilities	$	(75,000)	$	(75,000)
Net amount of contract liabilities in excess of contract assets	$	(61,779)	$	(61,779)