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Revenue from Contracts with Customers
 12 Months Ended
Oct. 01, 2022
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
Revenue is recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment, including reasonable profit margin, for performance completed to date. Revenue recognized over time is estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue is recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.
The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.
The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual
orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations.
Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.
The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.
Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.
The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.
Contract Costs
For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.
There were no other costs to obtain or fulfill customer contracts.
Disaggregated Revenue
The table below includes the Company’s revenue for the fiscal years indicated disaggregated by geographic reportable segment and market sector (in thousands):
2022
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Industrial$398,743 $1,288,577 $65,398 $1,752,718 
Healthcare/Life Sciences645,881 744,216 175,674 1,565,771 
Aerospace/Defense255,779 165,432 71,668 492,879 
     External revenue1,300,403 2,198,225 312,740 3,811,368 
Inter-segment sales10,285 102,415 3,575 116,275 
    Segment revenue$1,310,688 $2,300,640 $316,315 $3,927,643 
2021
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Industrial$462,789 $1,010,833 $75,353 $1,548,975 
Healthcare/Life Sciences566,693 605,249 154,830 1,326,772 
Aerospace/Defense277,870 134,842 80,406 493,118 
     External revenue1,307,352 1,750,924 310,589 3,368,865 
Inter-segment sales10,052 99,679 2,080 111,811 
    Segment revenue$1,317,404 $1,850,603 $312,669 $3,480,676 
2020
Reportable Segment:
AMERAPACEMEATotal
Market Sector (1):
Industrial$481,301 $954,925 $84,215 $1,520,441 
Healthcare/Life Sciences464,134 618,250 176,001 1,258,385 
Aerospace/Defense371,685 157,301 82,582 611,568 
     External revenue1,317,120 1,730,476 342,798 3,390,394 
Inter-segment sales10,729 94,355 6,304 111,388 
    Segment revenue$1,327,849 $1,824,831 $349,102 $3,501,782 
(1) During fiscal 2021, the Company consolidated the previously reported Industrial/Commercial and Communications market sectors to form the Industrial market sector. Fiscal 2020 amounts have been reclassified to conform to the current period presentation.
For fiscal 2022 approximately 84% and for fiscal 2021 and 2020 approximately 91% of the Company's revenue was recognized as products and services were transferred over time.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets and deferred revenue on the Company’s accompanying Consolidated Balance Sheets.
Contract Assets: For performance obligations satisfied at a point in time, billing occurs subsequent to revenue recognition, at which point the customer has been billed and the resulting asset is recorded within accounts receivable. For performance obligations satisfied over time as work progresses, the Company has an unconditional right to payment, which results in the recognition of contract assets. The following table summarizes the activity in the Company's contract assets during fiscal 2022 and 2021 (in thousands):
20222021
Contract assets, beginning of period$115,283 $113,946 
Revenue recognized during the period3,180,108 3,048,875 
Amounts collected or invoiced during the period(3,156,851)(3,047,538)
Contract assets, end of period$138,540 $115,283 
Deferred Revenue: Deferred revenue is recorded when consideration is received from a customer prior to transferring goods or services to the customer under the terms of the contract, which is included in other accrued liabilities on Consolidated Balance Sheets. As of October 1, 2022 and October 2, 2021 the balance of advance payments from customers that remained in other accrued liabilities was $298.8 million and $101.1 million, respectively. The advance payment is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect the company from the other party failing to adequately complete some or all of its obligations under the contract. Deferred revenue is recognized into revenue when all revenue recognition criteria are met. For performance obligations satisfied over time, recognition will occur as work progresses; otherwise deferred revenue will be recognized based upon shipping terms.