Unbilled Receivables	12 Months Ended
Sep. 30, 2016
Unbilled Receivables
Unbilled Receivables	5. Unbilled Receivables Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms. Unbilled receivables were $1.6 million and $3.9 million at September 30, 2016 and 2015, respectively, though fiscal 2015 is net of an impairment of $1.3 million. In January 2016, the Company negotiated and executed a new agreement with a certain customer to provide products and services with current technology resulting in an impairment of a fiscal 2015 unbilled receivable and the extinguishment of our obligation to deliver certain products under the original contract. The percentage-of-completion method of accounting for EDC revenue, requires estimates of profit margins for contracts be reviewed by the Company on a quarterly basis. If the initial estimates of revenues and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in revenue and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over a contract because such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Net cumulative catch-up adjustments resulting from changes in estimates increased operating income by $58,000 during the fiscal year ended September 30, 2016 and reduced operating income by, $117,000 and $1.5 million during fiscal years ended September 30, 2015 and 2014, respectively.

5. Unbilled Receivables

Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms. Unbilled receivables were $1.6 million and $3.9 million at September 30, 2016 and 2015, respectively, though fiscal 2015 is net of an impairment of $1.3 million. In January 2016, the Company negotiated and executed a new agreement with a certain customer to provide products and services with current technology resulting in an impairment of a fiscal 2015 unbilled receivable and the extinguishment of our obligation to deliver certain products under the original contract.

The percentage-of-completion method of accounting for EDC revenue, requires estimates of profit margins for contracts be reviewed by the Company on a quarterly basis. If the initial estimates of revenues and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in revenue and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over a contract because such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Net cumulative catch-up adjustments resulting from changes in estimates increased operating income by $58,000 during the fiscal year ended September 30, 2016 and reduced operating income by, $117,000 and $1.5 million during fiscal years ended September 30, 2015 and 2014, respectively.