Contract Receivables

12 Months Ended

Dec. 31, 2019

8. Contract Receivables

Contract receivables represent the Company’s unconditional rights to considerations due from a broad base of both domestic and international customers. All contract receivables are considered to be collectible within twelve months.

Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows:

(in thousands)	December 31,
	2019			2018
Billed receivables	$	11,041		$	15,998
Unbilled receivables		6,624			5,506
Allowance for doubtful accounts		(458	)		(427	)
Total contract receivables, net	$	17,207		$	21,077

Management reviews collectability of receivables periodically and records an allowance for doubtful accounts to reduce our receivables to their net realizable value when it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the receivable. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, and specific identification and review of customer accounts. During the years ended December 31, 2019 and 2018, the Company recorded bad debt expense of $31,000 and $294,000, respectively.

During January 2020, the Company invoiced $3.8 million of the unbilled amounts related to the balance at December 31, 2019.

The activity in the allowance for doubtful accounts is as follows:

(in thousands)	As of and for the
	Years ended December 31,
	2019		2018

Beginning balance	$	427	$	137
Current year provision		31		294
Current year write-offs		-		-
Currency adjustment		-		(4	)
Ending balance	$	458	$	427