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REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS In 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which we adopted in the first quarter of 2018. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a customer contract are satisfied. The standard also requires new and expanded disclosures regarding revenue recognition. We adopted the new standard on January 1, 2018, using the modified retrospective transition method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the January 1, 2018 opening balance of retained earnings. The comparative information for previous periods has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09 were as follows:
|  | Balance at December 31, 2017 |  | Adjustments |  | Balance at January 1, 2018
Balance Sheet |  |  |  |  |  |
Assets |  |  |  |  |  |
Receivables, net of allowance for doubtful accounts |  | $ | 2,113,930 |  |  | $ | (101,718 | ) |  | $ | 2,012,212 |
Contract assets |  | — |  |  | 147,764 |  |  | 147,764 |
Prepaid expenses and other |  | 63,116 |  |  | 4,021 |  |  | 67,137 |
Liabilities |  |  |  |  |  |
Accounts payable |  | 1,000,305 |  |  | (56,493 | ) |  | 943,812 |
Accrued expenses - transportation expense |  | — |  |  | 94,811 |  |  | 94,811 |
Accrued expenses - compensation |  | 105,316 |  |  | 1,964 |  |  | 107,280 |
Accrued expenses - other accrued liabilities |  | 58,229 |  |  | (2,752 | ) |  | 55,477 |
Deferred tax liabilities |  | 45,355 |  |  | 3,298 |  |  | 48,653 |
Equity |  |  |  |  |  |
Retained earnings |  | 3,437,093 |  |  | 9,239 |  |  | 3,446,332 |
The impact of adoption of ASU 2014-09 on our consolidated statements of operations and consolidated balance sheets were as follows. The adoption of ASU 2014-09 did not have a material impact upon our consolidated statements of cash flows.
|  | Three Months Ended September 30, 2018
|  | As reported |  | Balances without adoption of ASU 2014-09 |  | Effect of Change Higher / (Lower)
Income Statement |  |  |  |  |  |
Revenues |  |  |  |  |  |
Transportation |  | $ | 4,028,392 |  |  | $ | 4,018,151 |  |  | $ | 10,241 |
Sourcing (1) |  | 263,508 |  |  | 292,090 |  |  | (28,582 | )
Total Revenues |  | $ | 4,291,900 |  |  | $ | 4,310,241 |  |  | $ | (18,341 | )
Costs and expenses |  |  |  |  |  |
Purchased transportation and related services |  | $ | 3,359,520 |  |  | $ | 3,350,085 |  |  | $ | 9,435 |
Purchased products sourced for resale (1) |  | 238,336 |  |  | 266,918 |  |  | (28,582 | )
Personnel expenses |  | 335,299 |  |  | 335,198 |  |  | 101 |
Other selling, general, and administrative expenses |  | 112,772 |  |  | 112,772 |  |  | — |
Total Costs and Expenses |  | 4,045,927 |  |  | 4,064,973 |  |  | (19,046 | )
Income from operations |  | 245,973 |  |  | 245,268 |  |  | 705 |
Interest and other expense |  | (6,526 | ) |  | (6,526 | ) |  | — |
Income before provision for income taxes |  | 239,447 |  |  | 238,742 |  |  | 705 |
Provision for income taxes |  | 63,552 |  |  | 63,300 |  |  | 252 |
Net income |  | $ | 175,895 |  |  | $ | 175,442 |  |  | $ | 453 |
|  | Nine Months Ended September 30, 2018
|  | As reported |  | Balances without adoption of ASU 2014-09 |  | Effect of Change Higher / (Lower)
Income Statement |  |  |  |  |  |
Revenues |  |  |  |  |  |
Transportation |  | $ | 11,619,171 |  |  | $ | 11,537,467 |  |  | $ | 81,704 |
Sourcing (1) |  | 874,093 |  |  | 957,889 |  |  | (83,796 | )
Total Revenues |  | $ | 12,493,264 |  |  | $ | 12,495,356 |  |  | $ | (2,092 | )
Costs and expenses |  |  |  |  |  |
Purchased transportation and related services |  | $ | 9,714,318 |  |  | $ | 9,642,888 |  |  | $ | 71,430 |
Purchased products sourced for resale (1) |  | 787,494 |  |  | 871,290 |  |  | (83,796 | )
Personnel expenses |  | 1,004,226 |  |  | 1,003,575 |  |  | 651 |
Other selling, general, and administrative expenses |  | 330,660 |  |  | 330,660 |  |  | — |
Total Costs and Expenses |  | 11,836,698 |  |  | 11,848,413 |  |  | (11,715 | )
Income from operations |  | 656,566 |  |  | 646,943 |  |  | 9,623 |
Interest and other expense |  | (22,354 | ) |  | (22,354 | ) |  | — |
Income before provision for income taxes |  | 634,212 |  |  | 624,589 |  |  | 9,623 |
Provision for income taxes |  | 156,857 |  |  | 154,332 |  |  | 2,525 |
Net income |  | $ | 477,355 |  |  | $ | 470,257 |  |  | $ | 7,098 |
(1) We have identified certain customer contracts in our sourcing managed procurement business that changed from a principal to an agent relationship under the new standard. This change resulted in these contracts being recognized at the net amount we charge our customers but had no impact on income from operations.
|  | As of September 30, 2018
|  | As reported |  | Balances without adoption of ASU 2014-09 |  | Effect of Change Higher / (Lower)
Balance Sheet |  |  |  |  |  |
Assets |  |  |  |  |  |
Receivables, net of allowance for doubtful accounts |  | $ | 2,251,944 |  |  | $ | 2,327,352 |  |  | $ | (75,408 | )
Contract assets |  | 201,411 |  |  | — |  |  | 201,411 |
Prepaid expenses and other |  | 53,909 |  |  | 52,518 |  |  | 1,391 |
Liabilities |  |  |  |  |  |  |
Accounts payable |  | $ | 1,077,780 |  |  | $ | 1,128,878 |  |  | $ | (51,098 | )
Accrued expenses - transportation expense |  | 156,810 |  |  | — |  |  | 156,810 |
Accrued expenses - compensation |  | 121,813 |  |  | 119,197 |  |  | 2,616 |
Accrued expenses - other accrued liabilities |  | 68,863 |  |  | 71,929 |  |  | (3,066 | )
Deferred tax liabilities |  | 44,555 |  |  | 38,760 |  |  | 5,795 |
Equity |  |  |  |  |  |  |
Retained earnings |  | $ | 3,728,503 |  |  | $ | 3,712,166 |  |  | $ | 16,337 |
We typically do not receive consideration and amounts are not due from our customer prior to the completion of our performance obligation and as such contract liabilities as of September 30, 2018 and revenue recognized in the three and nine months ended September 30, 2018 resulting from contract liabilities were not significant. Contract assets and accrued expenses - transportation expense fluctuate from period to period primarily based upon shipments in-transit at period end. A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and nine months ended September 30, 2018 as follows:
| Three Months Ended September 30, 2018
| NAST |  | Global Forwarding |  | Robinson Fresh |  | All Other and Corporate |  | Total
Major Service Lines |  |  |  |  |  |  |  |  |
Transportation and logistics services | $ | 2,931,461 |  |  | $ | 639,268 |  |  | $ | 302,082 |  |  | $ | 155,581 |  |  | $ | 4,028,392 |
Sourcing | — |  |  | — |  |  | 263,508 |  |  | — |  |  | 263,508 |
Total | $ | 2,931,461 |  |  | $ | 639,268 |  |  | $ | 565,590 |  |  | $ | 155,581 |  |  | $ | 4,291,900 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |
Performance obligations completed over time | $ | 2,931,461 |  |  | $ | 639,268 |  |  | $ | 302,082 |  |  | $ | 155,581 |  |  | $ | 4,028,392 |
Performance obligations completed at a point in time | — |  |  | — |  |  | 263,508 |  |  | — |  |  | 263,508 |
Total | $ | 2,931,461 |  |  | $ | 639,268 |  |  | $ | 565,590 |  |  | $ | 155,581 |  |  | $ | 4,291,900 |
| Nine Months Ended September 30, 2018
| NAST |  | Global Forwarding |  | Robinson Fresh |  | All Other and Corporate |  | Total
Major Service Lines |  |  |  |  |  |  |  |  |
Transportation and logistics services | $ | 8,473,376 |  |  | $ | 1,810,619 |  |  | $ | 862,990 |  |  | $ | 472,186 |  |  | $ | 11,619,171 |
Sourcing | — |  |  | — |  |  | 874,093 |  |  | — |  |  | 874,093 |
Total | $ | 8,473,376 |  |  | $ | 1,810,619 |  |  | $ | 1,737,083 |  |  | $ | 472,186 |  |  | $ | 12,493,264 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |
Performance obligations completed over time | $ | 8,473,376 |  |  | $ | 1,810,619 |  |  | $ | 862,990 |  |  | $ | 472,186 |  |  | $ | 11,619,171 |
Performance obligations completed at a point in time | — |  |  | — |  |  | 874,093 |  |  | — |  |  | 874,093 |
Total | $ | 8,473,376 |  |  | $ | 1,810,619 |  |  | $ | 1,737,083 |  |  | $ | 472,186 |  |  | $ | 12,493,264 |
Approximately 92 percent of our total revenues for both the three and nine months ended September 30, 2018 are attributable to arranging for the transportation of our customer’s freight for which we transfer control and satisfy our performance obligation over the requisite transit period. A days in transit output method is used to measure the progress of our performance as of the reporting date. We determine the transit period based upon the departure date and the delivery date, which may be estimated if delivery has not occurred as of the reporting date. Determining the transit period and how much of it has been completed as of the reporting date may require management to make judgments that affect the timing of revenue recognized. We have determined that revenue recognition over the transit period provides a faithful depiction of the transfer of goods and services to our customer as our obligation is performed over the transit period. The transaction price for our performance obligation under these arrangements is generally fixed and readily determinable upon contract inception and is not contingent upon the occurrence or non-occurrence of another event. Approximately six percent and seven percent, respectively, of our total revenues for the three and nine months ended September 30, 2018 are attributable to buying, selling, and/or marketing of produce including fresh fruits, vegetables, and other value-added perishable items. Of these transactions, nearly all of our gross revenues are recognized at a point in time upon completion of our performance obligation, which is generally when the produce is received by our customer. The transaction price for our performance obligation under these arrangements is generally fixed and readily determinable upon contract inception and is not contingent upon the occurrence or non-occurrence of another event. Approximately two percent and one percent, respectively, of our total revenues for the three and nine months ended September 30, 2018 are attributable to value-added logistics services, such as customs brokerage, fee-based managed services, warehousing services, small parcel, and supply chain consulting and optimization services. Of these services, nearly all are recognized over time as we complete our performance obligation. Transaction price is determined and allocated to these performance obligations at their fixed fee or agreed upon rate multiplied by their associated measure of progress, which may be transactional volumes, labor hours, or time elapsed. Practical Expedients - Upon the adoption of ASU 2014-09, we have determined that we qualify for certain practical expedients to facilitate the adoption of the standard. We have elected to expense incremental costs of obtaining customer contracts (i.e. sales commissions) due to the short duration of our arrangements as the amortization period of such amounts is expected to be less than one year. These amounts are included within personnel expenses in our consolidated statements of operations and comprehensive income. In addition, we do not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the period as our contracts have an expected length of one year or less. Finally, for certain of our performance obligations such as fee-based managed services, supply chain consulting and optimization services, and warehousing services we have recognized revenue in the amount for which we have the right to invoice our customer as we have determined this amount corresponds directly with the value provided to the customer for our performance completed to date. Critical Accounting Policies and Estimates - We have updated our revenue recognition critical accounting policy to reflect the adoption of ASU 2014-09 below. REVENUE RECOGNITION. At contract inception, we assess the goods and services promised in our contracts with customers and identify our performance obligations to provide distinct goods and services to our customers. We have determined that the following distinct goods and services represent our primary performance obligations. Transportation and Logistics Services - As a third party logistics provider, our primary performance obligation under our customer contracts is to utilize our relationships with a wide variety of transportation companies to efficiently and cost-effectively transport our customer’s freight. Revenue is recognized for these performance obligations as they are satisfied over the contract term, which generally represents the transit period. The transit period can vary based upon the method of transport, generally a couple days for over-the-road, rail and air transportation, or several weeks in the case of an ocean shipment. When the customer’s freight reaches its intended destination our performance obligation is complete. Pricing for our services is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation. We also provide certain value-added logistics services, such as customs brokerage, fee-based managed services, warehousing services, small parcel, and supply chain consulting and optimization services. These services may include one or more performance obligations which are generally satisfied over the service period as we perform our obligations. The service period may be a very short duration, in the case of customs brokerage, or it may be longer in the case of managed services and supply chain consulting and optimization services. Pricing for our services is established in the customer contract and is dependent upon the specific needs of the customer but may be agreed upon at a fixed fee per transaction, labor hour, or service period. Payment is typically due within 30 days upon completion of our performance obligation. Sourcing services - We contract with grocery retailers, restaurants, foodservice distributors, and produce wholesalers to provide sourcing services under the trade name Robinson Fresh. Our primary service obligation under these contracts is the buying, selling, and/or marketing of produce including fresh fruits, vegetables, and other value-added perishable items. Revenue is recognized when our performance obligations under these contracts is satisfied at a point in time, generally when the produce is received by our customer. Pricing under these contracts is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation. In many cases, as additional performance obligations, we contract to arrange logistics and transportation of the products we buy, sell, and/or market. These performance obligations are satisfied over the contract term consistent with our other transportation and logistics services. The contract period is typically less than one year. Pricing for our services is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation. Total revenues represent the total dollar value of revenue recognized from contracts with customers for the goods and services we provide. Substantially all of our revenue is attributable to contracts with our customers. Our net revenues are our total revenues less purchased transportation and related services, including contracted motor carrier, rail, ocean, air, and other costs, and the purchase price and services related to the products we source. Most transactions in our transportation and sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods we sell. In these transactions, we are primarily responsible for fulfilling the promise to provide the specified good or service to our customer and we have discretion in establishing the price for the specified good or service. Additionally, in our sourcing business, in some cases we take inventory risk before the specified good has been transferred to our customer. Customs brokerage, managed services, freight forwarding, and sourcing managed procurement transactions are recorded at the net amount we charge our customers for the service we provide because many of the factors stated above are not present.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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