CONTRACT ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2024

Contract Assets And Liabilities

CONTRACT ASSETS AND LIABILITIES

3. CONTRACT ASSETS AND LIABILITIES

Contract assets represent revenue recognized on contracts in excess of amounts invoiced to the customers and the Company’s right to consideration is conditional on something other than the passage of time. Amounts may not exceed their net realizable value. Under the typical payment terms of our government as well as military contractor contracts, the customer retains a portion of the contract price until completion of the contract, as a measure of protection for the customer. Our government and military contractor contracts therefore typically result in revenue recognized in excess of billings, which we present as contract assets. Contract assets are classified as current assets. The Company’s contract liabilities represent customer payments received or due from the customer in excess of revenue recognized. Contract liabilities are classified as current liabilities.

	March 31, 2024		December 31, 2023
Contract assets	$	34,016,949	$	35,312,068
Contract liabilities		4,497,225		5,937,629

Contract assets at March 31, 2024 decreased $1,295,119 from December 31, 2023 primarily in our T-38 Pacer Classic program.

Contract liabilities decreased $1,440,404 during the three months ended March 31, 2024, primarily in our Collins Aerospace Pods programs.

Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the contract liabilities balance as of January 1, 2024 and 2023, respectively, was approximately $2.0 million and $1.5 million, respectively.