Contract Assets and Liabilities

12 Months Ended

Sep. 30, 2019

Contract Assets and Liabilities

Contract Assets and Liabilities

NOTE 6—CONTRACT ASSETS AND LIABILITIES

Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities (formerly referred to as customer advances prior to the adoption of ASC 606) include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in thousands):

	September 30,		October 1,
	2019		2018
Contract assets	$	349,559	$	272,210
Contract liabilities	$	46,170	$	70,127

Contract assets increased $77.3 million during the twelve months ended September 30, 2019, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the twelve months ended September 30, 2019 for which we have not yet billed. There were no significant impairment losses related to our contract assets during the twelve months ended September 30, 2019.

Contract liabilities decreased $24.0 million during the twelve months ended September 30, 2019, due to revenue recognition in excess of payments received on these performance obligations. During the twelve-month period ended September 30, 2019, we recognized $62.4 million of our contract liabilities at October 1, 2018 as revenue. We expect our contract liabilities to be recognized as revenue over the next twelve months.