Contract Assets and Liabilities

6 Months Ended

Jun. 30, 2022

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, 2022 and December 31, 2021, Contract assets and Contract liabilities consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Contract assets	$	136,624	$	113,249
Allowance for expected credit losses	(717)		(703)
Contract assets, net	$	135,907	$	112,546

Contract liabilities	$	5,008	$	6,959

Contract assets increased $23.4 million during the six-month period ended June 30, 2022. The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, in excess of the amounts billed to customers for contracts that were in a contract asset position. There were no impairment losses related to our Contract assets during the six month periods ended June 30, 2022 and June 30, 2021.

Contract liabilities decreased $2.0 million during the six-month period ended June 30, 2022, 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, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $5.5 million and $4.7 million, respectively.