| Revenue | Note 3. Revenue Adoption of ASC 606 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. Woodward adopted ASC 606 on October 1, 2018 and elected the modified retrospective transition method. The results for periods prior to fiscal year 2019 were not adjusted for the new standard and the cumulative effect of the change in accounting of $ 28,927 , as previously reported, was recognized as a net increase to retained earnings at the date of adoption. Woodward has elected to apply the modified retrospective method only to contracts that were not completed as of October 1, 2018. As a practical expedient under ASC 606, Woodward elected to reflect the aggregate effect of all modifications that occurred before the beginning of fiscal year 2019 to contracts for which Woodward had not recognized all revenue as of October 1, 2018 as part of the adjustment to retained earnings at the date of adoption. Subsequent to the adoption of ASC 606 and the issuance of Woodward ’ s unaudited Condensed Consolidated Financial Statements for the three-months ended December 31, 2018 and the three and six-months ended March 31, 2019, Woodward’s management identified an inconsistency in the application of ASC 606. The inconsistency resulted in errors that were cumulatively not material in determining the percentage of completion calculation on over time product revenue recognition, which caused the Condensed Consolidated Financial Statements for the quarters ended December 31, 2018 and March 31, 2019, as well as the cumulative impact of the adoption of ASC 606 on the Condensed Consolidated Balance Sheet as of October 1, 2018, to be misstated by amounts that management concluded were not material. Woodward evaluated the errors and, based on an analysis of the relevant quantitative and qualitative factors, determined the impact was not material to Woodward’s Consolidated Financial Statements for any prior annual or interim period. Therefore, management concluded that amendments of previously filed reports are not required. Woodward corrected the errors as of the date of adoption by revising the Condensed Consolidated Balance Sheet as of October 1, 2018 (see table in “Financial statement impact of the adoption of ASC 606” below). After revision, the cumulative effect of the change in accounting recognized as a net increase to retained earnings at the date of adoption was determined to be $ 38,745 , an increase of $ 9,818 from the amount originally recorded. Retained earnings as of April 1, 2019 increased by a corresponding amount in the Condensed Consolidated Statement of Stockholders’ Equity for the three-months ended June 30, 2019. To correct the errors for the three-months ended December 31, 2018 and for the three and six-months ended March 31, 2019, Woodward made an out-of-period correction in the three-months ended June 30, 2019. The correction resulted in increases to net sales of $ 13,614 , earnings before income taxes of $ 8,041 , net earnings of $ 6,037 , and diluted earnings per share of $ 0.09 for the three-months ended June 30, 2019, the majority of which relates to Woodward’s Aerospace segment (see table in “Financial statement impact of the adoption of ASC 606” below). Revenue Recognition Policy Revenue is recognized on contracts with Woodward’s customers for arrangements in which quantities and pricing are fixed and/or determinable and are generally based on customer purchase orders, often within the framework of a long-term supply arrangement with the customer. Woodward has determined that it is the principal in its sales transactions, as Woodward is primarily responsible for fulfilling the promised performance obligations, has discretion to establish the selling price, and generally assumes the inventory risk. A performance obligation is a promise in a contract with a customer to transfer a distinct product or service to the customer. Woodward recognizes revenue for performance obligations within a customer contract when control of the associated product or service is transferred to the customer. Some of Woodward’s contracts with customers contain a single performance obligation, while other contracts contain multiple performance obligations. Each product within a contract generally represents a separate performance obligation as Woodward does not provide significant installation and integration services, the products do not customize each other, and the products can function independently of each other. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer obtains control of the associated product or service. When there are multiple performance obligations within a contract, Woodward generally uses the observable standalone sales price for each distinct product or service within the contract to allocate the transaction price to the distinct products or services. In instances when a standalone sales price for each product or service is not observable within the contract, Woodward allocates the transaction price to each performance obligation using an estimate of the standalone selling price for each product or service, which is generally based on incurred costs plus a reasonable margin, for each distinct product or service in the contract. When determining the transaction price of each contract, Woodward considers contractual consideration payable by the customer and variable consideration that may affect the total transaction price. Variable consideration, consisting of early payment discounts, rebates and other sources of price variability, are included in the estimated transaction price based on both customer-specific information as well as historical experience. Woodward’s contracts with customers generally do not include a financing component. Woodward regularly reviews its estimates of variable consideration on the transaction price and recognizes changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. In the three and nine-months ended June 30, 2019, Woodward did not recognize a significant amount of revenue due to changes in transaction price from performance obligations that were satisfied, or partially satisfied, in prior periods. Customers sometimes trade in used products in exchange for new or refurbished products. In addition, Woodward’s customers sometimes provide inventory to Woodward which will be integrated into final products sold to those customers. Woodward obtains control of these exchanged products and customer provided inventory, and therefore, both are forms of noncash consideration. Noncash consideration paid by customers on overall sales transactions is additive to the transaction price. Woodward’s net sales and cost of goods sold include the value of such noncash consideration for the same amount, with no resulting impact to earnings before income taxes. Upon receipt of such inventory, Woodward recognizes an inventory asset and a contract liability. Woodward recognized revenue of $ 23,176 for the three-months and $ 67,938 for the nine-months ended June 30, 2019, related to noncash consideration received from customers. The Aerospace segment recognized $ 22,947 for the three-months and $ 66,961 for the nine-months ended June 30, 2019, while the Industrial segment recognized $ 229 for the three-months and $ 977 for the nine-months ended June 30, 2019. Sales of Products Woodward primarily generates revenue through the manufacture and sale of engineered aerospace and industrial products, including revenue derived from maintenance, repair and overhaul (“MRO”) performance obligations performed on products originally manufactured by Woodward and subsequently returned by original equipment manufacturer (“OEM”) or other end-user customers. The majority of Woodward’s costs incurred to satisfy MRO performance obligations are related to replacing and/or refurbishing component parts of the returned products to restore the units back to a condition generally comparable to that of the unit upon its initial sale to an OEM customer. Therefore, Woodward considers almost all of its revenue to be derived from product sales, including those related to MRO. Revenue from manufactured and MRO products represented 84 % and 13 %, respectively, of Woodward’s net sales for the three-months ended June 30, 2019 and 86 % and 12 %, respectively, for the nine-months ended June 30, 2019. Many Woodward products include embedded software or firmware that is critical to the performance of the product as designed. As the embedded software or firmware is essential to the functioning of the products sold it does not represent a distinct performance obligation separate from the related tangible product in which the software or firmware is embedded. Woodward does not generally sell or license software or firmware on a standalone basis. Software or firmware upgrades, if any, are generally paid for by the customer and treated as separate performance obligations. The products Woodward sells generally are not subject to risk of return, refund or other similar obligations. Woodward’s sales include product warranty arrangements with customers which are generally assurance-type warranties, rather than service-type warranties. Accordingly, Woodward accounts for warranty related promises to its customers as a guarantee for which a warranty liability is recorded when the related product or service is sold, rather than as a distinct performance obligation accounted for separately from the sale of the underlying product or service. Warranty liabilities are accrued for based on specifically identified warranty issues that are probable to result in future costs, or on a non-specific basis whenever past experience indicates that a normal and predictable pattern exists. Revenue from shipping and handling activities charged to customers are included in net sales when invoiced to the customer and the related costs are included in cost of goods sold. As a practical expedient under ASC 606, Woodward has elected to account for the costs of shipping and handling activities as a cost to fulfill a contract and not a promised product or service. Shipping and handling costs relating to the sale of products recognized at a point in time are recognized as incurred. Shipping and handling costs relating to the sale of products or services recognized over time are accrued and recognized during the earnings process. Material Rights and Costs to Fulfill a Contract Customers sometimes pay consideration to Woodward for product engineering and development activities that do not result in the immediate transfer of distinct products or services to the customer. There is an implicit assumption that without the customer making such advance payments to Woodward, Woodward’s future sales of products or services to the customer would be at a higher selling price; therefore, such payments create a “material right” to the customer that effectively gives the customer an option to acquire future products or services, at a discount, that are dependent upon the product engineering and development. Material rights are recorded as contract liabilities and will be recognized when control of the related products or services are transferred to the customer. Woodward capitalizes costs of product engineering and development identified as material rights up to the amount of customer funding as costs to fulfill a contract because the costs incurred up to the amount of the customer funding commitment are recoverable. Due to the uncertainty of the product success and/or demand, fulfillment costs in excess of the customer funding are expensed as incurred. As of June 30, 2019, other assets included $ 97,789 of capitalized costs to fulfill contracts with customers. Woodward recognizes the deferred material rights as revenue based on a percentage of actual sales to total estimated lifetime sales of the related developed products as the customers exercise their option to acquire additional products or services at a discount. Woodward amortizes the capitalized costs to fulfill a contract as cost of goods sold proportionally to the recognition of the associated deferred material rights. Estimated total lifetime sales are reviewed at least annually and more frequently when circumstances warrant a modification to the previous estimate. For the three and nine-months ended June 30, 2019, Woodward recognized an increase in revenue of $ 4,482 and $ 6,017 , respectively, and cost of goods sold of $ 9,255 and $ 9,578 , respectively, related to changes in estimated total lifetime sales. Other than amounts related to changes in estimate, for both the three and nine-months ended June 30, 2019, Woodward amortized $ 207 of costs to fulfill contracts with customers to cost of goods sold and amortized $ 278 of contract liabilities to revenue. In 2016, Woodward contributed certain contractual rights and intellectual property to a joint venture with the General Electric Company (“GE”). In exchange for a 50 % ownership interest in the joint venture and future rights to purchase products from the joint venture at favorable pricing, GE agreed to pay total consideration of $ 323,410 to Woodward. Under previous accounting guidance, Woodward concluded that the formation of the joint venture was not the culmination of an earnings event and deferred recognition of the consideration paid until earned in the future. Under ASC 606, Woodward also concluded that the formation of the joint venture was not a culmination of an earnings event and has further concluded that the consideration paid or receivable from GE represents a material right. Accordingly, under both ASC 606 and the previous standard, Woodward concluded it was appropriate to defer the consideration received as a liability and recognized it as an increase to net sales in proportion to revenue realized on sales of applicable fuel systems within the scope of the joint venture. Recognition to net sales in a particular period is determined as a percentage of total revenue expected to be realized by Woodward over the estimated remaining lives of the underlying commercial aircraft engine programs assigned to the joint venture. As of the adoption of ASC 606, Woodward has classified this as a contract liability with both a current and noncurrent portion. For further discussion of Woodward’s joint venture, see Note 6, Joint venture . Woodward does not record incremental costs of obtaining a contract, as Woodward does not pay sales commissions or incur other incremental costs related to contracts with Woodward’s customers for arrangements in which quantities and pricing are fixed and/or determinable . Point in time and over time revenue recognition Approximately one-half of Woodward’s customer contracts are recognized at the point in time when control of the products transfers to the customer, generally upon shipment of products, consistent with Woodward’s historical revenue recognition model. The remaining portion of Woodward’s revenues from sales of products and services to customers is recognized over time, rather than at a point in time, due primarily to the terms of certain customer contracts and/or the type of performance obligation being satisfied, as described below. The following table reflects the amount of revenue recognized as point in time or over time for the three and nine-months ended June 30, 2019: Three-Months Ended June 30, 2019 Nine-Months Ended June 30, 2019 Aerospace Industrial Consolidated Aerospace Industrial Consolidated Point in time $ 191,516 $ 147,194 $ 338,710 $ 563,713 $ 482,979 $ 1,046,692 Over time 307,259 106,036 413,295 810,903 306,065 1,116,968 Total net sales $ 498,775 $ 253,230 $ 752,005 $ 1,374,616 $ 789,044 $ 2,163,660 Point in time Control of the products generally transfers to the customer at a point in time, as the customer does not control the products as they are produced. Woodward exercises judgment and considers the timing of right of payment, transfer of the risk and rewards, transfers of title, transfer of physical possession, and customer acceptance when determining when control of the product transfers to the customer, generally upon shipment of products, consistent with Woodward’s historical revenue recognition model. Over time Performance obligations are satisfied and revenue is recognized over time if: (i) the customer receives the benefits as Woodward performs work, if the customer controls the asset as it is being enhanced, or if the product being produced for the customer has no alternative use to Woodward; and (ii) Woodward has an enforceable right to payment with a profit. For products being produced for the customer that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and where the products are substantially the same and have the same pattern of transfer to the customer, revenue is recognized as a series of distinct products. As Woodward satisfies MRO performance obligations, revenue is recognized over time, as the customer, rather than Woodward, controls the asset being enhanced. When services are provided, revenue from those services is recognized over time because control is transferred continuously to customers as Woodward performs the work. As a practical expedient, revenue for services that are short-term in nature are recognized using an output method as the customer is invoiced, as the invoiced amount corresponds directly to Woodward’s performance to date on the arrangement. For services that are not short-term in nature, MRO, and sales of products that have no alternative use to Woodward and an enforceable right to payment with a profit, Woodward uses an actual cost input measure to determine the extent of progress towards completion of the performance obligation. For these revenue streams, revenue is recognized over time as work is performed based on the relationship between actual costs incurred to-date for each contract and the total estimated costs for such contract at completion of the performance obligation (the cost-to-cost method). Woodward has concluded that this measure of progress best depicts the transfer of assets to the customer, because incurred costs are integral to Woodward’s completion of the performance obligation under the specific customer contract and correlate directly to the transfer of control to the customer. Contract costs include labor, material and overhead. Contract cost estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. As a significant change in one or more of these estimates could affect the profitability of its contracts, Woodward reviews and updates its estimates regularly upon receipt of new contracts with customers. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs will be revised. Such revisions to costs and revenue are recognized in the period in which the revisions are determined as a cumulative catch-up adjustment. The impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, Woodward recognizes provisions for estimated losses on uncompleted contracts in the period in which such losses are determined. For the three and nine-months ended June 30, 2019, adjustments to revenue related to changes in estimates were immaterial. Occasionally Woodward sells maintenance or service arrangements, extended warranties, or other stand ready services. Woodward recognizes revenue from such arrangements as a series of performance obligations over the time period in which the services are available to the customer. Contract assets Customer receivables include amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in “Accounts receivable” in Woodward’s Condensed Consolidated Balance Sheets. Amounts are billed in accordance with contractual terms, which are generally tied to shipment of the products to the customer, or as work progresses in accordance with contractual terms. Billed accounts receivable are typically due within 60 days. Consistent with common business practice in China, Woodward’s Chinese subsidiaries accept bankers’ acceptance notes from Chinese customers in settlement of certain customer billed accounts receivable. Bankers’ acceptance notes are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution. Bankers’ acceptance notes represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers’ acceptance note as of the maturity date. The maturity date of bankers’ acceptance notes varies, but it is Woodward’s policy to only accept bankers’ acceptance notes with maturity dates no more than 180 days from the date of Woodward’s receipt of such draft. Woodward has elected to adopt the practical expedient to not adjust the promised amounts of consideration for the effects of a significant financing component at contract inception as the financing component associated with accepting bankers’ acceptance notes has a duration of less than one year. Woodward’s contracts with customers generally have no other financing components. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require revenue to be recognized over time rather than at a point in time. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and the revenue recognized exceeds the amount billed to the customer as there is not yet a right to payment in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Accounts receivable consisted of the following: June 30, 2019 September 30, 2018 Billed receivables Trade accounts receivable $ 370,643 $ 403,590 Other (Chinese financial institutions) 86,059 23,191 Less: Allowance for uncollectible amounts ( 3,904 ) ( 3,938 ) Net billed receivables 452,798 422,843 Current unbilled receivables (contract assets), net 197,979 9,160 Total accounts receivable, net $ 650,777 $ 432,003 As of the October 1, 2018 adoption of ASC 606, Woodward recognized unbilled receivables of $ 135,668 , as adjusted. The remaining change in unbilled receivables was driven by the timing of revenue recognized in excess of billings, primarily in Woodward’s Aerospace segment. In addition, as of June 30, 2019 “Other assets” on the Condensed Consolidated Balance Sheets includes $ 894 of unbilled receivables not expected to be invoiced and collected within a period of twelve months. As of September 30, 2018, there were no unbilled receivables not expected to be invoiced and collected within a period of twelve months. Customer billed receivables are recorded at face amounts, less an allowance for doubtful accounts. In establishing the amount of the allowance related to the credit risk of accounts receivable, customer-specific information is considered related to delinquent accounts, past loss experience, bankruptcy filings, deterioration in the customer’s operating results or financial position, and current economic conditions. Bad debt losses are deducted from the allowance, and the related accounts receivable balances are written off when the receivables are deemed uncollectible. Recoveries of accounts receivable previously written off are recognized when received. In the three and nine-months ended June 30, 2019, receivables written off were immaterial. An allowance associated with anticipated other adjustments to the selling price or cash discounts is also established and is included in the allowance for uncollectible amounts. Changes to this allowance are recorded as increases or decreases to net sales as adjustments to the transaction price related to variable consideration. In establishing this amount, both customer-specific information and historical experience are considered. Unbilled receivables are stated net of adjustments for credit risk and the anticipated impacts of variable consideration on the transaction price, as applicable. Billed and unbilled accounts receivable from the U.S. Government were less than 10 % of total billed and unbilled accounts receivable at June 30, 2019. Contract liabilities Advance payments and billings in excess of revenue recognized represent contract liabilities and are recorded as deferred revenues when customers remit contractual cash payments in advance of Woodward satisfying performance obligations under contractual arrangements, including those with performance obligations satisfied over time. Woodward generally receives advance payments from customers related to maintenance or service arrangements, extended warranties, or other stand ready services, which it recognizes over the performance period. Contract liabilities are derecognized when revenue is recognized and the performance obligation is satisfied. Advance payments and billings in excess of revenue recognized are included in deferred revenue, which is classified as current or noncurrent based on the timing of when Woodward expects to recognize revenue. The current portion is included in “Accrued liabilities” and the noncurrent portion is included in “Other liabilities” at Woodward’s Condensed Consolidated Balance Sheets. Contract liabilities consisted of the following: June 30, 2019 September 30, 2018 Current Noncurrent Current Noncurrent Deferred revenue from material rights from GE joint venture formation $ 6,806 $ 234,038 $ 7,087 $ 235,300 Deferred revenue from advance invoicing and/or prepayments from customers 3,343 - 2,572 - Liability related to customer supplied inventory 13,021 - - - Deferred revenue from material rights related to engineering and development funding 3,137 98,889 - - Net contract liabilities $ 26,307 $ 332,927 $ 9,659 $ 235,300 As of the October 1, 2018 adoption of ASC 606, Woodward recognized current liabilities for the noncash consideration provided to Woodward in the form of customer supplied inventory of $ 11,951 , as adjusted, and current and noncurrent liabilities for deferred revenue from material rights related to engineering and development funding of $ 664 and $ 79,347 , respectively. All other changes in contract liability balances were due to normal operating activities. Woodward recognized revenue of $ 6,147 in the three-months and $ 26,459 in the nine-months ended June 30, 2019 from contract liabilities balances recorded as of October 1, 2018. Remaining performance obligations Remaining performance obligations related to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue as of June 30, 2019 was $ 1,659,788 , the majority of which relate to Woodward’s Aerospace segment. Woodward expects to recognize almost all of these remaining performance obligations within two year s after June 30, 2019. Remaining performance obligations related to material rights that have not yet been recognized in revenue as of June 30, 2019 was $ 436,876 , of which $ 2,253 is expected to be recognized in the remainder of fiscal year 2019 , $ 11,573 is expected to be recognized in fiscal year 2020 , and the balance is expected to be recognized thereafter. Woodward expects to recognize revenue from performance obligations related to material rights over the life of the underlying programs, which may be as long as forty years. Financial statement impact of the adoption of ASC 606 The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Balance Sheet as of October 1, 2018, as revised for the error correction detected in the three-months ended June 30, 2019, which was not material. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606 and the adjustment for the error subsequently corrected: September 30, 2018 as reported Effect of ASC 606 as previously reported October 1, 2018 as previously reported Adjustments for error correction October 1, 2018 as corrected ASSETS Current assets: Cash and cash equivalents $ 83,594 $ - $ 83,594 $ - $ 83,594 Accounts receivable, net (1)(2) 432,003 104,907 536,910 30,761 567,671 Inventories (1)(2) 549,596 ( 55,002 ) 494,594 ( 18,604 ) 475,990 Income taxes receivable (5) 6,397 ( 959 ) 5,438 ( 288 ) 5,150 Other current assets 43,207 ( 154 ) 43,053 - 43,053 Total current assets 1,114,797 48,792 1,163,589 11,869 1,175,458 Property, plant and equipment, net 1,060,005 - 1,060,005 - 1,060,005 Goodwill 813,250 - 813,250 - 813,250 Intangible assets, net (4) 700,883 ( 2,519 ) 698,364 - 698,364 Deferred income tax assets (5) 16,570 ( 975 ) 15,595 ( 210 ) 15,385 Other assets (1)(2)(3) 85,144 85,865 171,009 - 171,009 Total assets $ 3,790,649 $ 131,163 $ 3,921,812 $ 11,659 $ 3,933,471 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 153,635 $ - $ 153,635 $ - $ 153,635 Accounts payable 226,285 - 226,285 - 226,285 Income taxes payable (5) 16,745 4,141 20,886 1,211 22,097 Accrued liabilities (2)(3) 194,513 15,672 210,185 ( 1,047 ) 209,138 Total current liabilities 591,178 19,813 610,991 164 611,155 Long-term debt, less current portion 1,092,397 - 1,092,397 - 1,092,397 Deferred income tax liabilities (5) 170,915 3,833 174,748 1,682 176,430 Other liabilities (3) 398,055 78,631 476,686 ( 1 ) 476,685 Total liabilities 2,252,545 102,277 2,354,822 1,845 2,356,667 Stockholders’ equity: Preferred stock - - - - - Common stock 106 - 106 - 106 Additional paid-in capital 185,705 - 185,705 - 185,705 Accumulated other comprehensive losses ( 74,942 ) ( 41 ) ( 74,983 ) ( 4 ) ( 74,987 ) Deferred compensation 8,431 - 8,431 - 8,431 Retained earnings 1,966,643 28,927 1,995,570 9,818 2,005,388 2,085,943 28,886 2,114,829 9,814 2,124,643 Treasury stock at cost ( 539,408 ) - ( 539,408 ) - ( 539,408 ) Treasury stock held for deferred compensation ( 8,431 ) - ( 8,431 ) - ( 8,431 ) Total stockholders’ equity 1,538,104 28,886 1,566,990 9,814 1,576,804 Total liabilities and stockholders’ equity $ 3,790,649 $ 131,163 $ 3,921,812 $ 11,659 $ 3,933,471 (1) The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward’s businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in “Accounts receivable” and noncurrent unbilled receivables in “Other assets.” The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. (2) The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in “Inventories,” and in contract liabilities, which are included in “Accrued liabilities.” (3) Woodward recorded customer funding of product engineering and development identified as ma |
