Contract Receivables

12 Months Ended

Dec. 31, 2021

8. Contract Receivables

Contract receivables represent our unconditional rights to consideration due from a broad base of both domestic and international customers. Net contract receivables are considered to be collectible within twelve months.

Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows:

(in thousands)	December 31,
	2021			2020
Billed receivables	$	6,124		$	5,694
Unbilled receivables		6,143			5,160
Allowance for doubtful accounts		(1,010	)		(360	)
Total contract receivables, net	$	11,257		$	10,494

Management reviews collectability of receivables periodically and records an allowance for doubtful accounts to reduce our receivables to their net realizable value when it is probable that we will not be able to collect all amounts due according to the contractual terms of the receivable. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, and specific identification and review of customer accounts. During the years ended December 31, 2021 and 2020, we recorded bad debt expense of $678 thousand and $103 thousand, respectively. Included in the current year provision is an impairment of unbilled receivables of $824 thousand related to a customer contract with our GSE Beijing entity offset by $133 thousand recovery of bad debt from previously written off balances.

During January 2022, we invoiced $2.1 million of the unbilled amounts related to the balance at December 31, 2021.

The activity in the allowance for doubtful accounts is as follows:

(in thousands)	As of and for the
	Years ended December 31,
	2021			2020

Beginning balance	$	360		$	458
Current year (recovery) provision		678			103
Current year write-offs		(28	)		(201	)
Ending balance	$	1,010		$	360