The cumulative effect of initially applying the new revenue standard under ASC Topic 606 was recorded as an adjustment to the opening balance of retained earnings, which impacted the condensed consolidated balance sheet as follows:

($ in thousands)	August 31, 2018		ASC Topic 606 Adjustments			September 1, 2018
Assets
Inventories, net	$	79,233	$	(942	)	$	78,291
Other current assets		11,087		1,651			12,738

Liabilities and Stockholders' Equity
Other current liabilities	$	46,935	$	14		$	46,949
Deferred income tax liabilities		1,083		163			1,246
Retained earnings		484,886		532			485,418

The adoption of ASC Topic 606 had the following impact on the consolidated balance sheet as of August 31, 2019 and consolidated statement of earnings for the year ended August 31, 2019:

($ in thousands)	As Reported		Adjustments			Balance without adoption of ASC Topic 606
Assets
Inventories, net	$	92,287	$	3,729		$	96,016
Other current assets		15,704		(1,170	)		14,534

Liabilities and Stockholders' Equity
Other current liabilities	$	52,488	$	5,711		$	58,199
Retained earnings		474,740		(3,153	)		471,587

($ in thousands)	As Reported		Adjustments			Balance without adoption of ASC Topic 606
Statement of Earnings
Operating revenues	$	444,072	$	(6,359	)	$	437,713
Operating income		6,115		(3,410	)		2,705

The Company determines the appropriate revenue recognition for its contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Revenue is recognized when the Company satisfies the performance obligation by transferring control over goods or services to a customer. The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those goods or services pursuant to a contract with the customer. The Company does not recognize revenue in cases where collectability is not probable, and defers the recognition until collection is probable or payment is received. Sales taxes, value added taxes, and other taxes collected from its customers concurrent with its revenue activities are excluded from revenue.

The Company elected to use the practical expedient of treating shipping and handling costs associated with outbound freight as a fulfillment obligation instead of a separate performance obligation. Shipping and handling fees billed to the customer are reported as revenue and recorded in the same period as the associated fulfillment costs.

Customer rebates, cash discounts and other sales incentives are recorded as a reduction of revenues in the period in which the sale is recognized. The Company establishes provisions for estimated warranties and does not generally sell extended warranties for its products.

In addition, the Company elected to use the practical expedient of not disclosing the value of unsatisfied performance obligations at the end of the period when the contract has an original expected length of service of one year or less. For contracts with a length longer than twelve months, the unsatisfied performance obligations were $7.0 million at August 31, 2019.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the stand-alone selling price of each distinct good or service in the contract. For most performance obligations, the stand-alone selling price is directly observable as these goods or services are also sold separately by the Company. For performance obligations where the stand-alone selling price is not directly observable, the Company uses the expected cost plus a margin approach, under which the expected costs of satisfying a performance obligation are forecasted and then an appropriate margin for that distinct good or service is added.

The Company’s performance obligations are satisfied at either a point in time or over time depending on the measure of progress applied toward the complete satisfaction in the transfer of control of the related goods and services to the customer.

Revenue recognized at a point in time is derived from the sale of equipment and related parts. Revenue recognition for equipment and parts is generally at a point in time upon transfer of control of the goods to the customer which generally happens upon shipment of goods to the customer.

Revenue recognized over time is primarily derived from engineering services and remote monitoring subscription services as well as custom and contract manufactured products. For engineering services, transfer of control to the customer is continuous over time. Therefore, revenue is recognized based on the extent of progress towards completion of the performance obligation. Judgment is required when selecting the method to measure progress towards completion. For fixed price agreements, the Company recognizes revenue on an inputs basis, using total costs incurred to date as a percentage of total costs expected to be incurred. For time and material arrangements, the Company utilizes an output method of resources consumed such as the expended hours times the hourly billing rate. For remote monitoring subscription services, customers are generally billed in advance and revenue is recognized ratably over the life of the agreement.

For custom and contract manufactured products, the transfer of control is continuous over the life of the agreement and products do not have an alternate use to the Company. When the customer agreements contain contractual termination clauses and right to payment for work performed to date, the revenue from these agreements is recognized over time as the products are produced.

The Company also leases certain infrastructure property to customers. Revenues from the leasing of infrastructure property are recognized on a straight-line basis over the lease term.

A breakout by segment of revenue recognized over time versus point in time for twelve months ended August 31, 2019 is as follows:

	Year ended August 31, 2019
($ in thousands)	Irrigation		Infrastructure		Total
Point in time	$	318,544	$	78,768	$	397,312
Over time		32,954		6,054		39,008
Revenue from the contracts with customers		351,498		84,822		436,320

Lease revenue		—		7,752		7,752
Total operating revenues	$	351,498	$	92,574	$	444,072

Further disaggregation of revenue is disclosed in the Note 18 – Industry Segment Information.

Contract assets arise when recorded revenue for a contract exceeds the amounts billed under the terms of such contract. Contract liabilities arise when billed amounts exceed revenue recorded. Amounts are billable to customers upon various measures of performance, including achievement of certain milestones and completion of specified units of completion of the contract.

Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract liabilities primarily relate to the advance consideration received from customers for customer contracts, for which transfer of control of products or performance of service occurs in the future, and therefore revenue is recognized upon completion of the performance obligation. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred.

At August 31, 2019, contract assets amounted to $1.3 million. This amount is included within other current assets on the consolidated balance sheet. The contract asset attributable to the cumulative effect from the adoption of ASC Topic 606 totaled $1.1 million; the contract asset at August 31, 2018 was $0.5 million.

At August 31, 2019, the contract liability amounted to $18.4 million. Contract liabilities are included within other current liabilities and noncurrent liabilities on the consolidated balance sheet. During the year ended August 31, 2019, the Company recognized $8.0 million of revenue that was included in the liability as of August 31, 2018. The revenue recognized was due to performance obligations being completed during the year. Amounts included here exclude deferred lease revenues that are also included within other current liabilities.