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REVENUE AND CONTRACT BALANCES | 9 Months Ended
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Jul. 01, 2023
Revenue from Contract with Customer [Abstract] |
REVENUE AND CONTRACT BALANCES | 12. REVENUE AND CONTRACT BALANCES The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended July 1, 2023, and July 2, 2022, the service revenue was not material. The Company reports revenue based on its reportable segments. The Company believes that reporting revenue on this basis provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 15: Segment Information, for disclosure of revenue by segment. Contract Balances Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets. Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities. Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations. The following table shows the changes in contract asset balances during the three and nine months ended July 1, 2023 and July 2, 2022:
| Three months ended |  | Nine months ended
(in thousands) | July 1, 2023 |  | July 2, 2022 |  | July 1, 2023 |  | July 2, 2022
Contract assets, beginning of period | $ | 29,210 |  |  | $ | 26,721 |  |  | $ | 26,317 |  |  | $ | — |
Additions | 1,337 |  |  | 18,563 |  |  | 4,230 |  |  | 45,284 |
Transferred to accounts receivable or collected | (20,365) |  |  | — |  |  | (20,365) |  |  | — |
Contract assets, end of period | $ | 10,182 |  |  | $ | 45,284 |  |  | $ | 10,182 |  |  | $ | 45,284 |
The following table shows the changes in contract liability balances during the three and nine months ended July 1, 2023 and July 2, 2022:
| Three months ended |  | Nine months ended
(in thousands) | July 1, 2023 |  | July 2, 2022 |  | July 1, 2023 |  | July 2, 2022
Contract liabilities, beginning of period | $ | 6,556 |  |  | $ | 17,300 |  |  | $ | 3,160 |  |  | $ | 15,596 |
Revenue recognized | (12,404) |  |  | (29,612) |  |  | (28,950) |  |  | (104,796) |
Additions | 11,832 |  |  | 17,996 |  |  | 31,774 |  |  | 94,884 |
Contract liabilities, end of period | $ | 5,984 |  |  | $ | 5,684 |  |  | $ | 5,984 |  |  | $ | 5,684 |

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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/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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