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Revenue Recognition | 9 Months Ended
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Sep. 30, 2018
Revenues [Abstract] |
Revenue Recognition | Revenues A summary of significant net changes in the contract assets and the contract liabilities balances during the period is as follows:
| 2018
| Contract liabilities, less contract assets
| (in thousands)
Beginning balance, January 1 | $ | 59,808 |
Changes due to business combination | 36,936 |
Revenues recognized from beginning contract liability | (31,688 | )
Increases due to amounts collected or due | 200,428 |
Revenues recognized from current period increases | (142,439 | )
Other | (847 | )
Ending balance, September 30 | $ | 122,198 |
On January 1, 2018, total contract assets were $11.3 million and total contract liabilities were $71.1 million. On September 30, 2018, total contract assets were $15.7 million and total contract liabilities were $137.9 million. The contract assets primarily relate to contracts that include a retention clause and allocations related to contracts with multiple performance obligations. The contract liabilities primarily relate to deferred revenue, such as extended warranty and maintenance cost. During the three months ended September 30, 2018, revenue recognized of $1.6 million was related to amounts that was included as a contract liability at January 1, 2018. Transaction price allocated to the remaining performance obligations Total transaction price allocated to remaining performance obligations represent committed but undelivered products and services for contracts and purchase orders at period end. Twelve-month remaining performance obligations represent the portion of total transaction price allocated to remaining performance obligations that we estimate will be recognized as revenue over the next 12 months. Total transaction price allocated to remaining performance obligations is not a complete measure of our future revenues as we also receive orders where the customer may have legal termination rights but are not likely to terminate. Total transaction price allocated to remaining performance obligations related to contracts is approximately $1.1 billion for the next twelve months and approximately $706 million for periods longer than 12 months. The total remaining performance obligations is comprised of product and service components. The service component relates primarily to maintenance agreements for which customers pay a full year's maintenance in advance, and service revenues are generally recognized over the service period. Total transaction price allocated to remaining performance obligations also includes our extended warranty contracts, for which revenue is recognized over the warranty period, and hardware, which is recognized as units are delivered. The estimate of when remaining performance obligations will be recognized requires significant judgment. Cost to obtain a contract and cost to fulfill a contract with a customer Cost to obtain a contract and costs to fulfill a contract were capitalized and amortized using a systematic rational approached to align with the transfer of control of underlying contracts with customers. While amounts were capitalized, amounts are not material for disclosure. Disaggregation of revenue Refer to Note 15 and the Consolidated Statement of Operations for disclosure regarding the disaggregation of revenue into categories which depict how revenue and cash flows are affected by economic factors. Specifically, our operating segments and geographical regions as disclosed, and categories for products, which include hardware and software and services as presented. Impacts on financial statements Under the modified retrospective transition method, we are required to provide additional disclosures during 2018 of the amount by which each financial statement line item is affected in the current reporting period, as compared with the guidance that was in effect before the change, and an explanation of the reasons for significant changes, if any. The effects of ASC 606 and Subtopic ASC 340-40 on our Consolidated Balance Sheet as of September 30, 2018 were total deferred revenue would have been higher by approximately $23 million, of which, approximately $11 million would have been classified as short term. The difference in deferred revenue reflects the timing of revenue recognition related to certain of our customer contracts. The net impact of all adjustments would have resulted in an increase to our accumulated deficit of approximately $18 million. The difference in accumulated deficit reflects the cumulative effect of adoption and the net effect thereof on the Consolidated Statement of Operations for the three and nine months ended September 30, 2018. The impact of the adoption was not material to the other line items. The effect of ASC 606 and Subtopic ASC 340-40 was not material to the Consolidated Statements of Operations for the three and nine months ended September 30, 2018.

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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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