NOTE 5. BALANCE SHEET COMPONENTS

Inventory

As of December 31, 2019 and 2018, our inventory consisted of the following components:



	December 31,
(in thousands)	2019		2018
Purchased materials	$	3,966	$	6,222
Work in process		4,594		7,341
Finished goods		4,752		4,315
Inventory	$	13,312	$	17,878

For the year ended December 31, 2019, approximately $5.1 million and $0.5 million of inventory reserves due to excess or obsolesce were charged to cost of goods and cost of service, respectively. For the year ended December 31, 2018 approximately $2.0 million and $0.1 million of inventory reserves due to excess or obsolesce were charged to cost of goods and cost of service, respectively.

Property and Equipment, Net

As of December 31, 2019 and 2018, our property and equipment, net, consisted of the following components:



	December 31,
(in thousands)	2019		2018
Laboratory equipment and machinery	$	25,173	$	24,111
Leasehold improvements		29,902		29,821
Computer equipment		11,851		9,484
Software		4,747		4,734
Furniture and fixtures		2,422		2,422
Construction in progress		193		608
		74,288		71,180
Less: Accumulated depreciation		(44,218)		(37,107)
Property and equipment, net	$	30,070	$	34,073

Depreciation expense during the years ended December 31, 2019, 2018 and 2017was $7.3 million, $7.2 million and $8.4 million, respectively.

Accrued Expenses

As of December 31, 2019 and 2018, our accrued expenses consisted of the following components:



	December 31,
(in thousands)	2019		2018
Salaries and benefits	$	9,748	$	8,523
Accrued product development costs		67		561
Accrued Tenant Improvements for Menlo Park building		998		694
Inventory accrual		229		499
Accrued professional services and legal fees		943		1,588
Other		1,257		958
Accrued expenses	$	13,242	$	12,823

Deferred Revenue

As of December 31, 2019, we had a total of $9.6 million of deferred revenue from our service contracts, $7.6 million of which was recorded as “deferred revenue, current” to be recognized over the next year and the remaining $2.0 million was recorded as “deferred revenue, non-current” to be recognized in the next 2 to 4 years.

Revenue recognized during the year ended December 31, 2019 includes $6.5 million of previously deferred revenue that was included in “deferred revenue, current” as of December 31, 2018.