Consolidated Water Co. Ltd. Revenue Disclosure
6. Contracts in progress
Revenue recognized and amounts billed on contracts in progress are summarized as follows:
December 31, | ||||||
| 2024 |
| 2023 | |||
Revenue recognized to date on contracts in progress | $ | 114,590,991 |
| $ | 108,952,682 | |
Amounts billed to date on contracts in progress |
| (121,833,354) |
| (101,724,459) | ||
Retainage | 2,585,952 | 8,087,823 | ||||
Net contract asset /(liability) | $ | (4,656,411) | $ | 15,316,046 | ||
The above net balances are reflected in the accompanying consolidated balance sheet as follows:
December 31, | ||||||
2024 | 2023 | |||||
Contract assets | $ | 4,470,243 |
| $ | 21,553,057 | |
Contract liabilities |
| (9,126,654) |
| (6,237,011) | ||
Net contract asset /(liability) | $ | (4,656,411) | $ | 15,316,046 | ||
The significant decrease in contract assets from December 31, 2023 to December 31, 2024 is attributable to the completion of the construction contract with the WAC for the Red Gate plant in Grand Cayman and the completion of the construction contract with Liberty Utilities for a water treatment facility in Arizona.
During the year ended December 31, 2023, the Company adjusted its prior year estimates of the total contract costs for two of its construction contracts. These changes in accounting estimates resulted in an increase in the services segment’s income from operations and the Company’s consolidated net income by $2,356,439 and $1,750,750, respectively, for the year ended December 31, 2023. This adjustment increased basic and earnings per share by $0.11 for the year ended December 31, 2023.
As of December 31, 2024, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $151.3 million in aggregate transaction price for contracts with an original expected length of greater than one year. The Company expects to earn revenue as it satisfies its performance obligations under those contracts in the amount of approximately $44.2 million during the year ending December 31, 2025 and $107.1 million thereafter. In addition, the Company recognized revenue of approximately $6.2 million in the year ended December 31, 2024, that was included in the contract liability balance as of December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 17, 2025 | Showing above |
| 2023 | Mar 27, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 29, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 15, 2016 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.