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Revenue Recognition | 12 Months Ended
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Dec. 31, 2018
Revenue Recognition [Abstract] |
Revenue Recognition | REVENUE RECOGNITION Impact of the Adoption of Topic 606 On January 1, 2018, the Company adopted Topic 606 following the modified retrospective method of adoption applied to those contracts that were not completed as of the date of adoption. In accordance with the Topic 606 transition guidance, the financial information in the comparative periods presented herein has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of Topic 606 did not have a material impact on the Company’s financial position, results of operations or cash flows. However, the Company’s Consolidated Statement of Operations for the year ended December 31, 2018 includes a reduction in Net sales of approximately 1% within the Environmental Solutions Group based on a revised “Principal vs. Agent” analysis resulting in a change from gross to net presentation, with a corresponding reduction in Cost of sales. The following table summarizes the impact of the adoption of Topic 606 on the Company’s Consolidated Statements of Operations for the year ended December 31, 2018:
| Year Ended December 31, 2018
(in millions) | As Reported |  | Balances Without Adoption of Topic 606 |  | Effect of Change
Net sales | $ | 1,089.5 |  |  | $ | 1,104.8 |  |  | $ | (15.3 | )
Cost of sales | 807.4 |  |  | 822.7 |  |  | (15.3 | )
Gross profit | $ | 282.1 |  |  | $ | 282.1 |  |  | $ | — |
Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied; generally this occurs at a point in time, with the transfer of control of the Company’s products or services to customers. For most of the Company’s product sales, these criteria are met at the time the product is shipped; however, occasionally control passes later or earlier than shipment due to customer contract or letter of credit terms. In circumstances where credit is extended, payment terms generally range from 30 to 120 days and customer deposits may be required. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for transferring products or providing services. Expected returns and allowances are estimated and recognized based primarily on an analysis of historical experience, with Net sales presented net of such returns and allowances. The Company enters into sales arrangements that may provide for multiple performance obligations to a customer. These arrangements may include software and non-software components that function together to deliver the products’ essential functionality. The Company identifies all performance obligations that are to be delivered separately under the sales arrangement and allocates revenue to each performance obligation based on its relative standalone selling price. The Company uses an observable price to determine the standalone selling price or a cost plus margin approach when one is not available. In general, performance obligations include hardware, integration and installation services. The allocated revenue for each performance obligation is recognized as such performance obligations are satisfied. Net sales include sales of products and billed freight related to product sales. Freight has not historically comprised a material component of Net sales. The Company has elected to account for such shipping and handling activities as a fulfillment cost and not as a separate performance obligation. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and are excluded from Net sales. Information relating to the disaggregation of Net sales by geographic region, based on the location of the end customer, is included in Note 16 – Segment Information. The following table presents the Company’s Net sales disaggregated by major product line:
(in millions) | Year Ended December 31, 2018
Environmental Solutions |
Vehicles and equipment (a) | $ | 687.2 |
Parts | 118.6 |
Rental income (b) | 41.8 |
Other (c) | 15.9 |
Total net sales | $ | 863.5 |
Safety and Security Systems |
Public safety and security equipment | 134.3 |
Industrial signaling equipment | 53.4 |
Warning systems | 38.3 |
Total net sales | $ | 226.0 |
Total net sales | $ | 1,089.5 |
(a) | Includes net sales from the sale of new and used vehicles and equipment, including sales of rental equipment.
(b) | Represents income from vehicle and equipment lease arrangements with customers, recognized in accordance with Topic 840.
(c) | Primarily includes revenues from services such as maintenance and repair work and the sale of extended warranty contracts.
Contract Balances The Company recognizes contract liabilities when cash payments, such as customer deposits, are received in advance of the Company’s satisfaction of the related performance obligations. Contract liabilities are recognized as Net sales when the related performance obligations are satisfied, which generally occurs within three to six months of the cash receipt. Contract liability balances are not materially impacted by any other factors. The Company’s contract liabilities were $12.1 million and $8.9 million, as of December 31, 2018 and 2017, respectively. Contract assets, such as unbilled receivables, were not material as of any of the periods presented herein. Practical Expedients As the Company’s standard payment terms are less than a year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company has also elected the practical expedient under ASC 340-40-25-4 and recognizes the incremental costs of obtaining a contract, such as sales commissions, as expense when incurred as the amortization period of the asset that otherwise would have been recognized is one year or less. Further, as permitted by ASC 606-10-50-14, the Company does not disclose the value of its remaining performance obligations for contracts with an original expected duration of one year or less.

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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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