Contract Assets and Liabilities

9 Months Ended

Sep. 30, 2023

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

Contract assets include unbilled amounts typically resulting from revenues 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 and the customer is invoiced. 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 September 30, 2023 and December 31, 2022, Contract assets and Contract liabilities consisted of the following:


(in thousands)	September 30, 2023		December 31, 2022
Contract assets	$	166,666	$	149,443
Allowance for expected credit losses	(833)		(748)
Contract assets, net	$	165,833	$	148,695

Contract liabilities	$	3,645	$	15,176

Contract assets, net increased $17.1 million during the nine months ended September 30, 2023. 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 nine months ended September 30, 2023 and September 30, 2022.

Contract liabilities decreased $11.5 million during the nine months ended September 30, 2023, 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 nine months ended September 30, 2023 and 2022 that was included in the Contract liability balance at the beginning of the year was $14.4 million and $5.0 million, respectively.