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Recent Accounting Pronouncements | 9 Months Ended
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Sep. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements - Recently Adopted. In May 2014, the FASB issued a new accounting standards update addressing revenue from contracts with customers, which clarifies existing accounting literature relating to how and when a company recognizes revenue. Under the standard, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In doing so, the Company is required to use more judgment and make more estimates in connection with the accounting for revenue contracts with customers than under previous guidance, as described in Note 2. Under the standard, (i) an entity should account for a promise to provide a customer with a right to access the entity’s IP as a performance obligation satisfied over time because the customer will simultaneously receive and consume the benefit from the entity’s performance of providing access to its IP as the performance occurs, and (ii) an entity’s promise to provide a customer with the right to use its IP is satisfied at a point in time. In addition, revenues from contracts with significant financing components should be recognized at an amount that reflects the price that a customer would have paid if the customer had paid cash for the goods or services when they transfer to the customer (i.e. adjustment for the time value of money). For sales and usage based royalties, the new standard requires that the Company include in the transaction price some or all of an amount of estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company used the modified retrospective method of adoption and recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings on January 1, 2018. Comparative prior year periods were not adjusted. The new accounting standard was applied to all contracts at the date of initial application. The cumulative effect of applying the new revenue standard, primarily relating to financing components of contracts executed in prior periods and estimates of variable consideration for sales and usage based royalty agreements executed in prior periods, was as follows (in thousands):
|  | Balance at December 31, 2017 |  | Adjustments Due to ASC 606 |  | Balance at January 1, 2018
Balance Sheets: |  |  |  |  |  |
Accounts receivable |  | $ | 153 |  |  | $ | 4,542 |  |  | $ | 4,695 |
Royalties and contingent legal fees payable |  | 1,601 |  |  | 1,728 |  |  | 3,329 |
Accumulated deficit |  | (320,018 | ) |  | 2,506 |  |  | (317,512 | )
Noncontrolling interests |  | 1,358 |  |  | 308 |  |  | 1,666 |
The impact of the adoption of the new accounting standard on the condensed consolidated balance sheet and statement of operations was as follows (in thousands):
|  | September 30, 2018
|  | Balance as Reported |  | Balance under Legacy GAAP |  | Effect of Change
Balance Sheets: |  |  |  |  |  |
Accounts receivable |  | $ | 10,572 |  |  | $ | 7,250 |  |  | $ | 3,322 |
Royalties and contingent legal fees payable |  | 7,193 |  |  | 6,011 |  |  | 1,182 |
|  | Three Months Ended September 30, 2018
|  | Balance as Reported |  | Balance under Legacy GAAP |  | Effect of Change
Statements of Operations: |  |  |  |  |  |
Revenues |  | $ | 13,725 |  |  | $ | 15,798 |  |  | $ | (2,073 | )
Inventor royalties |  | 1,181 |  |  | 1,050 |  |  | 131 |
Contingent legal fees |  | 2,949 |  |  | 3,598 |  |  | (649 | )
|  | Nine Months Ended September 30, 2018
|  | Balance as Reported |  | Balance under Legacy GAAP |  | Effect of Change
Statements of Operations: |  |  |  |  |  |
Revenues |  | $ | 82,303 |  |  | $ | 83,583 |  |  | $ | (1,280 | )
Inventor royalties |  | $ | 24,166 |  |  | $ | 23,718 |  |  | $ | 448 |
Contingent legal fees |  | $ | 19,745 |  |  | $ | 20,339 |  |  | $ | (594 | )
In May 2017, the FASB issued amended guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award changes as a result of the change in terms or conditions. This amendment is effective prospectively for annual periods beginning on or after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements - Not Yet Adopted. In February 2016, the FASB issued an accounting standard update which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. Management is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures and expects to adopt the new standard effective January 1, 2019.

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- References No definition available. + Details
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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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