NOTE 6 – CONTRACT ASSETS AND CONTRACT LIABILITIES

Accounts Receivable

We record accounts receivable for our unconditional rights to consideration arising from our performance under contracts with our Members and other parties. Uncollectible amounts, if any, are identified on a specific basis and charged to expense in the period determined to be uncollectible. See Note 13 – Revenue.

Contract liabilities (unearned revenue)

A contract liability represents an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We have received deposits from others and these deposits are reflected in unearned revenue (included in other deferred credits and other liabilities on our consolidated statements of financial position) before revenue is recognized, resulting in contract liabilities. During the nine months ended September 30, 2019, we recognized $0.6 million of this unearned revenue in other operating revenues on our consolidated statements of operations.

Our contract assets and liabilities consist of the following (dollars in thousands):


	September 30,		December 31,
	2019		2018
Accounts receivable - Members	$	109,565	$	107,572

Other accounts receivable - trade:
Non-member electric sales		5,465		6,998
Other		14,974		6,006
Total other accounts receivable - trade		20,439		13,004
Other accounts receivable - nontrade		1,115		9,430
Total other accounts receivable	$	21,554	$	22,434

Contract liabilities (unearned revenue)	$	7,257	$	7,906

Other accounts receivable increased primarily due to a retroactive royalty rate reduction granted to Colowyo Mine by the Office of Natural Resources Revenue. The decision reduces the royalty rate from 12.5 percent to 8 percent for coal extracted under certain leases from September 1, 2015 through June 30, 2019.