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Revenue Recognition | 6 Months Ended
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Jun. 30, 2018
Revenue Recognition |
Revenue Recognition | Note 3. Revenue Recognition Revenue from Contracts with Customers On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method. Under the modified retrospective method, the Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Revenue Recognition ("Topic 605"). The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: 1. Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an agreement with a customer that defines each party's rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) both parties to the contract are committed to perform their respective obligations, (iii) the contract has commercial substance, and (iv) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's payment history or, in the case of a new customer, published credit and financial information pertaining to the customer. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether promised products or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised products or services are accounted for as a combined performance obligation. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. To the extent the transaction price is variable, revenue is recognized at an amount equal the consideration to which the Company expects to be entitled. This estimate includes customer sales incentives which are accounted for as a reduction to revenue and estimated using either the expected value method or the most likely amount method, depending on the nature of the program. The Company will adjust its consideration for any rebates and commissions if it is more likely than not that these conditions will be met. 4. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. 5. Recognize revenue when or as the Company satisfies a performance obligation The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Disaggregation of Revenue Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 14, "Geographic Information.” Revenue is also classified by major product category and is presented below (in thousands):
|  | Three months ended June 30,
|  | 2018 |  | % of Revenue |  | 2017 |  | % of Revenue
Data Center |  | $ | 69,040 |  | 78.6% |  | $ | 99,298 |  | 84.6%
CATV |  |  | 14,184 |  | 16.2% |  |  | 14,404 |  | 12.3%
Telecom |  |  | 4,157 |  | 4.7% |  |  | 3,077 |  | 2.6%
FTTH |  |  | 166 |  | 0.2% |  |  | 125 |  | 0.1%
Other |  |  | 275 |  | 0.3% |  |  | 467 |  | 0.4%
Total Revenue |  | $ | 87,822 |  | 100.0% |  | $ | 117,371 |  | 100.0%
|  | Six months ended June 30,
|  | 2018 |  | % of Revenue |  | 2017 |  | % of Revenue
Data Center |  | $ | 119,623 |  | 78.2% |  | $ | 178,892 |  | 83.8%
CATV |  |  | 24,752 |  | 16.2% |  |  | 27,498 |  | 12.9%
Telecom |  |  | 7,743 |  | 5.1% |  |  | 6,248 |  | 2.9%
FTTH |  |  | 277 |  | 0.2% |  |  | 223 |  | 0.1%
Other |  |  | 666 |  | 0.4% |  |  | 734 |  | 0.3%
Total Revenue |  | $ | 153,061 |  | 100.0% |  | $ | 213,595 |  | 100.0%

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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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