B2W Flipbooks

Page | 54 Transaction Price The nature of the Company's contracts gives rise to several types of variable consideration, including claims and award and incentive fees. The Company includes in the contract estimates additional revenue for submitted contract modifi cations or claims against the customer when the Company believes it has an enforceable right to the modifi cation or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, the Company considers the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. The Company includes award or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and the Company's best judgment at the time. Because of certainty in estimating these amounts, they are included in the transaction price of the contracts and the associated remaining performance obligations. Contract Modifi cations Contract modifi cations are routine in the performance of the Company's contracts. Contracts are often modifi ed to account for changes in the contract specifi cations or requirements. In most instances, contract modifi cations are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Sample Note Disclosures (continued) > Service Contracts The Company also performs service contracts and recognizes the revenue on those contracts at a point in time as the work is performed and the customer is charged for the service. Estimates It is reasonably possible that changes in estimates may occur in the near term and those revisions and cost and revenue estimates are refl ected in the period in which the facts that require the revisions become known. The contract asset, "Revenue in excess of billings on contracts in progress," represents revenue recognized in excess of amounts billed. The contract liability, "Billings in excess of revenue on contracts in progress," represents billings in excess of revenue recognized.

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