DEFERRED REVENUES AND COSTS

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

DEFERRED REVENUES AND COSTS

10.DEFERRED REVENUES AND COSTS

The Company defers revenues and all direct costs associated with the sale of pre-need cemetery merchandise and services until the merchandise is delivered or the services are performed. The Company recognizes deferred merchandise and service revenues as customer contract liabilities within long-term liabilities on its consolidated balance sheets. The Company recognizes deferred direct costs associated with pre-need cemetery merchandise and service revenues as deferred selling and obtaining costs within long-term assets on its consolidated balance sheets. The Company also defers the costs to obtain new pre-need cemetery and new prearranged funeral business as well as the investment earnings on the prearranged services and merchandise trusts. Such costs are recognized when the associated performance obligation is fulfilled based upon the net change in the customer contract liabilities. All other selling costs are expensed as incurred. Additionally, the Company has elected the practical expedient of not recognizing incremental costs to obtain a contract as incurred, as the associated amortization period is typically one year or less.

Deferred revenues and related costs consisted of the following (in thousands):

	September 30, 2021		December 31, 2020
Deferred contract revenues	$	866,845	$	832,373
Deferred merchandise trust revenue		150,815		87,218
Deferred merchandise trust unrealized gains (losses)		9,905		29,573
Deferred revenues	$	1,027,565	$	949,164
Deferred selling and obtaining costs	$	122,488	$	116,900

For the nine months ended September 30, 2021 and 2020, the Company recognized $56.3 million and $34.7 million, respectively, of the customer contract liabilities balance that existed at December 31, 2020 and 2019, respectively, as revenue.

The components of the customer contract liabilities, net in the Company’s consolidated balance sheets at September 30, 2021 and December 31, 2020 were as follows (in thousands):

	September 30, 2021			December 31, 2020
Customer contract liabilities, gross	$	1,054,062		$	973,444
Amounts due from customers for unfulfilled performance obligations on cancellable    pre-need contracts		(26,497	)		(24,280	)
Customer contract liabilities, net	$	1,027,565		$	949,164

The Company expects to service approximately 55% of its deferred revenue in the first 4-5 years and approximately 80% of its deferred revenue within 18 years. The Company cannot estimate the period when it expects its remaining performance obligations will be recognized, because certain performance obligations will only be satisfied at the time of death.