Quarterly report pursuant to Section 13 or 15(d)

Sales, Contract Assets and Contract Liabilities

v3.19.3
Sales, Contract Assets and Contract Liabilities
 6 Months Ended
Sep. 30, 2019
Sales, Contract Assets and Contract Liabilities [Abstract]  
Sales, Contract Assets and Contract Liabilities

8. Sales, Contract Assets and Contract Liabilities

 

The Company has analyzed its sales contracts under ASC 606 and has identified performance conditions that are not directly correlated with contractual payment terms with customer. As a result of the timing differences between customer payments and satisfaction of performance conditions, contractual assets and contractual liabilities have been recognized.

 

Contracts are tailored to meet each customer's unique requirements. However, the Company's performance obligations can generally be identified as:

 

● Specified service works
● Certified design and engineering works
● Equipment delivery and acceptance
● Commissioned equipment

 

For the three and six months ended September 30, 2019, the Company recognized sales revenues in proportion to performance obligations as noted below:

 

    Three Months Ended September 30,
2019
$		     Six Months Ended September 30,
2019
$		  
             
Specified service works     381,338       381,338  
Certified design and engineering works     24,448,427       26,121,354  
Delivered equipment to customers, net of obligations     33,251,840       36,040,052  
Commissioned equipment     4,656,939       4,960,035  
                 
Total     62,738,544       67,502,779  

 

Changes in the Company's contract assets and liabilities for the periods are noted as below:

  

    Contract Assets
$		     Sales
(Cost of sales)
$		     Contract Liabilities
$		  
                   
Balance, March 31, 2018     –       –       –  
                         
Customer receipts and receivables     –       –       (20,925,437 )
Sales recognized in earnings     –       2,074,950       2,074,950  
Payments and accruals under contracts     14,172,975       –       –  
Costs recognized in earnings     (1,935,150 )     (1,935,150 )     –  
                         
Balance, March 31, 2019     12,237,825               (18,850,487 )
                         
Customer receipts and receivables     –       –       (76,802,249 )
Sales recognized in earnings     –       67,502,779       67,502,779  
Payments and accruals under contracts*     61,005,163       –       –  
Costs recognized in earnings     (40,448,336 )     (40,448,336 )     –  
                         
Balance, September 30, 2019     32,794,652               (28,149,957 )

  

*Payments and accruals under contracts assets includes $13,101,107 presented as amounts which are receivable subject to fulfillment of future performance obligations.