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Revenue Recognition | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606, "Revenue from Contracts with Customers," using the full retrospective method to present all periods reported on a consistent basis. Accordingly, prior-period results have been restated to apply the provisions of this ASC. As a result of this adoption, revenue for software-only products sold as part of multiple-deliverable arrangements are no longer deferred when vendor-specific objective evidence of fair value does not exist for the undelivered elements of the arrangement. This change results in earlier recognition of revenue. In addition, certain of the Company’s product accessory sales, which were reported on a net basis, are now reported on a gross basis as a result of applying the expanded guidance in the new standard related to principal versus agent considerations. This change results in the Company reporting higher revenue and higher cost of revenue when these sales are reported on a gross basis, although the gross margin dollars do not change. Furthermore, for arrangements that include customer-specified acceptance criteria, revenue is recognized when the Company can objectively determine that control has been transferred to the customer in accordance with the agreed-upon specifications in the contract, which may occur before formal customer acceptance. This change primarily impacts revenue recognition for arrangements in the logistics industry where certain customer solutions include installed products and results in earlier recognition of revenue. The adoption of the standard impacted our previously-reported results as follows (in thousands):
Statement of Operations |  |  |  |  |  |  |  |  |  |  |
| Three-months Ended |  | Nine-months Ended
| October 1, 2017 |  | October 1, 2017
| As previously reported |  | Adjustment |  | As restated |  | As previously reported |  | Adjustment |  | As restated
Revenue | $ | 259,739 |  |  | $ | 6,303 |  |  | $ | 266,042 |  |  | $ | 567,585 |  |  | $ | 15,576 |  |  | $ | 583,161 |
Cost of revenue | 62,360 |  |  | 5,701 |  |  | 68,061 |  |  | 128,056 |  |  | 14,701 |  |  | 142,757 |
Gross margin | 197,379 |  |  | 602 |  |  | 197,981 |  |  | 439,529 |  |  | 875 |  |  | 440,404 |
Operating income | 110,247 |  |  | 602 |  |  | 110,849 |  |  | 207,211 |  |  | 875 |  |  | 208,086 |
Income before income tax expense | 112,150 |  |  | 602 |  |  | 112,752 |  |  | 212,918 |  |  | 875 |  |  | 213,793 |
Income tax expense (benefit) | 9,802 |  |  | 457 |  |  | 10,259 |  |  | 8,843 |  |  | 491 |  |  | 9,334 |
Net income | $ | 102,348 |  |  | $ | 145 |  |  | $ | 102,493 |  |  | $ | 204,075 |  |  | $ | 384 |  |  | $ | 204,459 |
Net income per weighted-average common and common-equivalent share:
Basic | $ | 0.59 |  |  | $ | — |  |  | $ | 0.59 |  |  | $ | 1.18 |  |  | $ | — |  |  | $ | 1.18 |
Diluted | $ | 0.57 |  |  | $ | — |  |  | $ | 0.57 |  |  | $ | 1.14 |  |  | $ | — |  |  | $ | 1.14 |
Balance Sheet |  |  |  |  |
| December 31, 2017
| As previously reported |  | Adjustment |  | As restated
Prepaid expenses and other current assets | $ | 30,800 |  |  | $ | (117 | ) |  | $ | 30,683 |
Accrued income taxes | 11,391 |  |  | 112 |  |  | 11,503 |
Deferred revenue and customer deposits | 9,969 |  |  | (549 | ) |  | 9,420 |
Retained earnings | 668,267 |  |  | 320 |  |  | 668,587 |
The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):
|  | Three-months Ended |  | Nine-months Ended
|  | September 30, 2018 |  | October 1, 2017 |  | September 30, 2018 |  | October 1, 2017
Europe |  | $ | 115,592 |  |  | $ | 146,230 |  |  | $ | 242,161 |  |  | $ | 252,386 |
Americas |  | 58,830 |  |  | 54,902 |  |  | 189,859 |  |  | 155,977 |
Greater China |  | 32,796 |  |  | 35,546 |  |  | 101,130 |  |  | 84,764 |
Other Asia |  | 25,003 |  |  | 29,364 |  |  | 79,902 |  |  | 90,034 |
|  | $ | 232,221 |  |  | $ | 266,042 |  |  | $ | 613,052 |  |  | $ | 583,161 |
The following table summarizes disaggregated revenue information by revenue type (in thousands):
|  | Three-months Ended |  | Nine-months Ended
|  | September 30, 2018 |  | October 1, 2017 |  | September 30, 2018 |  | October 1, 2017
Standard products and services |  | $ | 150,993 |  |  | $ | 159,981 |  |  | $ | 493,019 |  |  | $ | 453,464 |
Application-specific customer solutions |  | 81,228 |  |  | 106,061 |  |  | 120,033 |  |  | 129,697 |
|  | $ | 232,221 |  |  | $ | 266,042 |  |  | $ | 613,052 |  |  | $ | 583,161 |
Costs to Fulfill a Contract Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $6,811,000 and $3,230,000 as of September 30, 2018 and December 31, 2017, respectively. Accounts Receivable, Contract Assets, and Contract Liabilities Accounts receivable represent amounts billed and currently due from customers which are reported at their net estimated realizable value. The Company maintains reserves against its accounts receivable for potential credit losses. Credit losses recognized on accounts receivable were immaterial for the three-month and nine-month periods ended September 30, 2018 and October 1, 2017, respectively. Contract assets consist of unbilled revenue which arises when revenue is recognized in advance of billing for certain application-specific customer solutions contracts. Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition. The following table summarizes the deferred revenue and customer deposits activity for the nine-month period ended September 30, 2018 (in thousands):
| Amount
Balance as of December 31, 2017 | $ | 9,420 |
Increases to deferred revenue and customer deposits | 55,408 |
Recognition of revenue | (50,590 | )
Foreign exchange rate changes | (986 | )
Balance as of September 30, 2018 | $ | 13,252 |
As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations, as our contracts have an original expected duration of less than one year.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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