Assessment, Permitting and Response Revenues—Assessment, Permitting and Response revenues are generated from multidisciplinary environmental consulting services. The majority of the contracts are fixed-price or time and material based.

Measurement and Analysis Revenues—Measurement and Analysis revenues are generated from emissions sampling, testing and reporting services, leak detection services, ambient air monitoring services and laboratory testing services. The majority of the contracts are fixed-price or time-and-materials based.

Remediation and Reuse Revenues—Remediation and Reuse revenues are generated from engineering, design, implementation and operating and maintenance (“O&M”) services primarily to treat contaminated water, remove contaminants from soil or create biogas from waste. Engineering, design and implementation contracts are predominantly fixed-fee and time-and-materials based. Services on the majority of O&M contracts are provided under long-term fixed-fee contracts.

Disaggregation of Revenue—The Company disaggregates revenue by its operating segments. The Company believes disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, and uncertainty of revenue and cash flows are affected by economic factors. Disaggregated revenue disclosures are provided in Note 18.

Contract Balances—The Company presents contract balances for unbilled receivables (contract assets), as well as customer advances, deposits and deferred revenue (contract liabilities) within contract assets and accounts payable and accrued expenses, respectively, on the unaudited condensed consolidated statements of financial position. Amounts are generally billed at periodic intervals (e.g. weekly, bi-weekly or monthly) as work progresses in accordance with agreed-upon contractual terms. The Company utilizes the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component as the period between when the Company transfers services to a customer and when the customer pays for those services is one year or less. Amounts recorded as unbilled receivables are generally for services the Company is not entitled to bill based on the passage of time. Under certain contracts, billing occurs subsequent to revenue recognition, resulting in contract assets. The Company sometimes receives advances or deposits from customers before revenue is recognized, resulting in contract liabilities.

The following table presents the Company’s contract balances:


	September 30,		December 31,
	2022		2021
Contract assets	$	60,444	$	40,139
Contract liabilities		23,270		27,907

Contract assets acquired through business acquisitions amounted to $1.3 million and $0.5 million as of September 30, 2022 and December 31, 2021, respectively. Contract liabilities acquired through business acquisitions amounted to zero and $ 0.5 million as of

September 30, 2022 and December 31, 2021, respectively. Revenue recognized during the three and nine months ended September 30, 2022, included in the contract liabilities balance at the beginning of the year was $10.3 million and $23.6 million, respectively. The revenue recognized from the contract liabilities consisted of the Company satisfying performance obligations during the normal course of business.

The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied in prior periods during the three and nine months ended September 30, 2022 was not material.

Remaining Unsatisfied Performance Obligations—Remaining unsatisfied performance obligations represent the total dollar value of work to be performed on contracts awarded and in progress. The amount of remaining unsatisfied performance obligations increases with new contracts or additions to existing contracts and decreases as revenue is recognized on existing contracts. Contracts are included in the amount of remaining unsatisfied performance obligations when an enforceable agreement has been reached. As of September 30, 2022 and December 31, 2021, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $92.0 million and $108.7 million, respectively. As of September 30, 2022, the Company expected to recognize approximately $67.8 million of this amount as revenue within a year and $24.2 million the year after.

Accounts Receivable, Net—The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business. Accounts receivable, net consisted of the following:



	September 30, 2022			December 31, 2021
Accounts receivable, invoiced	$	82,649		$	101,709
Accounts receivable, other		544			1,385
Allowance for doubtful accounts		(2,266	)		(4,581	)
Accounts receivable—net	$	80,927		$	98,513

As of September 30, 2022, the Company did not have any customers that exceeded 10.0% of its gross accounts receivable. As of December 31, 2021, the Company had one customer who accounted for 23.1% of its gross accounts receivable. For the three and nine months ended September 30, 2022, the Company had one customer who accounted for 11.1% and 14.8% of revenue, respectively. During the three months ended September 30, 2021, the Company did not have any customers that exceeded 10.0% of revenue. During the nine months ended September 30, 2021, the Company had three customers who accounted for 12.1%, 11.4% and 10.7% of revenue. The Company performs ongoing credit evaluations and based on past collection experience, the Company believes that the receivable balances from these largest customers do not represent a significant credit risk.

Accounts receivable are shown on the face of the consolidated statements of financial position, net of an allowance for doubtful accounts. The allowance for doubtful accounts is established at the origination of an account in accordance with ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). ASC 326 requires the Company to estimate the lifetime expected credit losses on such instruments and to record an allowance to offset the receivables. In determining the allowance for doubtful accounts, the Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends. The allowance for doubtful accounts consisted of the following:


	Beginning Balance		Bad Debt (Recovery) Expense			Charged to Allowance			Other(1)		Ending Balance
Nine months ended September 30, 2022	$	4,581	$	(821	)	$	(1,621	)	$	127	$	2,266
Year ended December 31, 2021		4,265		1,135			(1,548	)		729		4,581

____________________

(1)

This amount consists of additions to the allowance due to business acquisitions.