Contract Assets and Liabilities

6 Months Ended

Jun. 30, 2021

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract]

Contract assets includes unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net when the entitlement to pay becomes unconditional. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract liabilities are included in Accrued liabilities in the Consolidated Balance Sheets.

Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.

As of June 30, 2021 and December 31, 2020, Contract assets and Contract liabilities consisted of the following:


(in thousands)	June 30, 2021		December 31, 2020
Contract assets	$	114,097	$	140,348
Allowance for expected credit losses	(872)		(1,059)
Contract assets, net	$	113,225	$	139,289

Contract liabilities	$	7,136	$	8,206

Contract assets decreased $26.1 million during the six-month period ended June 30, 2021. The decrease was primarily due to invoicing to customers exceeding revenue recognized for satisfied performance obligations for contracts that were in a contract asset position. There were no credit losses related to our Contract assets during the six month periods ended June 30, 2021 and June 30, 2020.

Contract liabilities decreased $1.1 million during the six-month period ended June 30, 2021, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a contract liability position. Revenue recognized for the six-month periods ended June 30, 2021 and 2020 that was included in the Contract liability balance at the beginning of the year was $4.7 million and $2.1 million, respectively.