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REVENUE RECOGNITION
 9 Months Ended
Sep. 30, 2020
Revenue From Contract With Customer [Abstract]  
REVENUE RECOGNITION

18.

REVENUE RECOGNITION:

Effective on January 1, 2018, the Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (Topic 606). The standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows from a contract with a customer.

During the year ended December 31, 2019, the Company entered into a transaction with one of its customers for emitters involving elements of variable consideration. Due to the escalation in trade policy tension between the governments of China and the United States, the customer required a larger than normal shipment of emitters having a right to return them through March 15, 2020 in order to accommodate their uncertain production needs. Per Topic 606, the Company was constrained to recognizing revenue on this unique shipment to the extent that it was probable that a significant revenue reversal would not occur and deferred recognition of the remainder until after the inherent uncertainties of the transaction were resolved. These uncertainties included factors that were outside of the Company’s influence, including the customer’s production needs and complexities associated with the current international health and trade issues in China. On March 15, 2020, the inherent uncertainties of the transaction were resolved as the customer did not exercise their right of return provision. This event resulted in the recognition of the previously constrained revenue during the nine months ended September 30, 2020.

For both three-month periods ended September 30, 2020 and 2019, the Company recorded 97% of its revenue from sales of materials, respectively, and 3% from the providing of services through Adesis, respectively. For the nine months ended September 30, 2020 and 2019, the Company recorded 96% and 97% of its revenue from sales of materials and 4% and 3%, respectively, from the providing of services through Adesis, respectively.

Contract Balances

The following table provides information about assets and liabilities associated with our contracts from customers (in thousands):

 

 

 

As of September 30, 2020

 

Accounts receivable

 

$

99,350

 

Short-term unbilled receivables

 

 

6,600

 

Long-term unbilled receivables

 

 

8,256

 

Short-term deferred revenue

 

 

138,391

 

Long-term deferred revenue

 

 

51,657

 

Short-term and long-term unbilled receivables are classified as other current assets and other assets, respectively, on the Consolidated Balance Sheets. The deferred revenue balance at September 30, 2020 will be recognized as materials are shipped to customers over the remaining contract periods. The significant customer contracts (individually representing greater than 10% of revenue for the nine months ended September 30, 2020) expire in 2022. As of September 30, 2020, the Company had $13.8 million of backlog associated with committed purchase orders from its customers for phosphorescent emitter material. These orders are anticipated to be fulfilled within the next 90 days.

Significant changes in the unbilled receivables and deferred liabilities balances for the nine months ended September 30, 2020 and 2019, are as follows (in thousands):

 

 

 

Nine Months Ended September 30, 2020

 

 

 

Unbilled Receivables

 

 

Deferred Revenue

 

Balance at December 31, 2019

 

$

1,362

 

 

$

(144,862

)

Revenue recognized that was previously included in deferred revenue

 

 

—

 

 

 

97,556

 

Increases due to cash received

 

 

—

 

 

 

(144,200

)

Cumulative catch-up adjustment arising from changes in estimates of

   transaction price

 

 

—

 

 

 

1,458

 

Unbilled receivables recognized

 

 

13,494

 

 

 

—

 

Net change

 

 

13,494

 

 

 

(45,186

)

Balance at September 30, 2020

 

$

14,856

 

 

$

(190,048

)

 

 

 

 

Nine Months Ended September 30, 2019

 

 

 

Unbilled Receivables

 

 

Deferred Revenue

 

Balance at December 31, 2018

 

$

1,020

 

 

$

(122,567

)

Revenue recognized that was previously included in deferred revenue

 

 

—

 

 

 

94,044

 

Increases due to cash received

 

 

—

 

 

 

(113,849

)

Cumulative catch-up adjustment arising from changes in estimates of

   transaction price

 

 

—

 

 

 

689

 

Unbilled receivables recognized

 

 

7,571

 

 

 

—

 

Transferred to receivables from unbilled receivables

 

 

(1,225

)

 

 

—

 

Net change

 

 

6,346

 

 

 

(19,116

)

Balance at September 30, 2019

 

$

7,366

 

 

$

(141,683

)