Deferred Revenue

12 Months Ended

Dec. 31, 2012

8.	Deferred Revenue

As of December 31, 2012 and 2011, we have $2.1 million and $1.5 million, respectively, of deferred license fee revenue related to prepayments for future license fees from three and one customers, respectively, and a total of $0.6 million and $0.4 million, respectively, of deferred engineering development fees from thirteen and four customers, respectively. We defer the license fees until we have met all accounting requirements for revenue recognition as per unit royalty products are distributed or licensed by the Company’s customers and the engineering development fee revenue until such time as the engineering work has been completed and accepted by our customers.

- Definition

The entire disclosure for deferred revenues at the end of the reporting period, and description and amounts of significant changes that occurred during the reporting period. Deferred revenue is a liability as of the balance sheet date related to a revenue producing activity for which revenue has not yet been recognized. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

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