14) Revenues From Contracts With Customers

6 Months Ended

Jun. 30, 2020

Disclosure Text Block [Abstract]

14) Revenues From Contracts With Customers

14) Revenues from Contracts with Customers

The Company reports revenues from contracts with customers pursuant to ASC No. 606, Revenue from Contracts with Customers.

Information about Performance Obligations and Contract Balances

The Company’s cemetery and mortuary segment sells a variety of goods and services to customers in both at-need and pre-need situations. Due to the timing of the fulfillment of the obligation, revenue is deferred until that obligation is fulfilled.

The Company’s three types of future obligations are as follows:

Pre-need Merchandise and Service Revenue: All pre-need merchandise and service revenue is deferred and the funds are placed in trust until the need arises, the merchandise is received or the service is performed. The trust is then relieved, and the revenue and commissions are recognized.

At-need Specialty Merchandise Revenue: At-need specialty merchandise revenue consists of customizable merchandise ordered from a manufacturer such as markers and bases. When specialty merchandise is ordered, it can take time to manufacture and deliver the product. Revenue is deferred until the at-need merchandise is received.

Deferred Pre-need Land Revenue: Deferred pre-need revenue and corresponding commissions are deferred until 10% of the funds are received from the customer through regular monthly payments. Deferred pre-need land revenue is not placed in trust.

Complete payment of the contract does not constitute fulfillment of the performance obligation. Goods or services are deferred until such time the service is performed or merchandise is received. Pre-need contracts are required to be paid in full prior to a customer using a good or service from a pre-need contract. Goods and services from pre-need contracts can be transferred when paid in full from one owner to another. In such cases, the Company will act as an agent in transferring the requested goods and services. A transfer of goods and services does not fulfill an obligation and revenue remains deferred.

The opening and closing balances of the Company’s receivables, contract assets and contract liabilities are as follows:

	Contract Balances
	Receivables (1)	Contract Asset	Contract Liability
Opening (1/1/2020)	$       2,778,879	$                         -	$              12,607,978
Closing (6/30/2020)	3,575,456	-	12,930,466
Increase/(decrease)	796,577	-	322,488
	Contract Balances
	Receivables (1)	Contract Asset	Contract Liability
Opening (1/1/2019)	$       2,816,225	$                         -	$              12,508,625
Closing (12/31/2019)	2,778,879	-	12,607,978
Increase/(decrease)	(37,346)	-	99,353
(1) Included in Receivables, net on the condensed consolidated balance sheets

The amount of revenue recognized and included in the opening contract liability balance for the three months ended June 30, 2020 and 2019 was $880,633 and $889,578, respectively, and for the six months ended June 30, 2020 and 2019 was $1,831,406 and $1,631,098, respectively.

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment.

Disaggregation of Revenue

The following table disaggregates revenue for the Company’s cemetery and mortuary contracts for the periods presented:

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
Major goods/service lines
At-need	$  3,257,705	$ 3,025,783	$      6,642,896	$    5,994,850
Pre-need	1,443,073	974,947	2,515,973	1,684,508
	$  4,700,778	$ 4,000,730	$      9,158,869	$    7,679,358
Timing of Revenue Recognition
Goods transferred at a point in time	$  3,088,616	$ 2,754,230	$      6,082,320	$    5,144,840
Services transferred at a point in time	1,612,162	1,246,500	3,076,549	2,534,518
	$  4,700,778	$ 4,000,730	$      9,158,869	$    7,679,358

The following table reconciles revenues from cemetery and mortuary contracts to Note 7 – Business Segment Information for the Cemetery/Mortuary Segment for the periods presented:

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
Net mortuary and cemetery sales	$ 4,700,778	$  4,000,730	$  9,158,869	$  7,679,358
Gains (losses) on investments and other assets	482,383	354,500	(177,740)	853,097
Net investment income	71,647	162,562	276,493	275,371
Other revenues	51,497	25,215	62,379	94,466
Revenues from external customers	5,306,305	4,543,007	9,320,001	8,902,292