following information summarizes the Company’s contract assets and liabilities:
31, 2018|| ||
31, 2017|| |
|Contract Assets - Unbilled
|| || || ||
|| || || |
|| ||487,086|| ||
|| ||—|| |
|Product shipped, revenue deferred||
|| ||645,199|| ||
|| ||941,724|| |
and license fees||
|| ||5,100,402|| ||
|| ||5,372,908|| |
|Total deferred revenue||
|| ||6,232,687|| ||
|| ||6,314,632|| |
|Total current deferred revenue||
Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the
difference between the revenue that was earned but not billed on service contracts and revenue from system contracts that was
recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the
arrangements. Deferred revenue is primarily related to service contracts, for which the service fees are billed up-front, generally
quarterly or annually, and for amounts billed in advance for system contracts for which some performance obligations remain outstanding.
For service contracts, the associated deferred revenue is generally recognized ratably over the service period. For system contracts,
the associated deferred revenue is recognized when the remaining performance obligations are satisfied. The Company did not have
any impairment losses on its contract assets for the periods presented.
recognized for the twelve months ended December 31, 2018 and 2017, that was included in the deferred revenue balance at the beginning
of each reporting period was $5.5 million and $8.0 million, respectively.
Company has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized
as the Company expects to generate future economic benefits from the related revenue generating contracts after the initial capital
sales transaction. The costs capitalized as contract acquisition costs included in prepaid expenses and other assets, in the Company’s
balance sheet was $0.3 million as of December 31, 2018. The Company did not incur any impairment losses during any of the periods
of systems revenue include direct product costs, installation labor and other costs, estimated warranty costs, and initial training
and product maintenance costs. These costs are recorded at the time of sale. Costs of disposable revenue include direct product
costs and estimated warranty costs and are recorded at the time of sale. Cost of revenue from services and license fees are recorded
and Development Costs
research and development costs are expensed in the period incurred. Amounts receivable from strategic relationships under research
reimbursement agreements are recorded as a contra-research and development expense in the period reimbursable costs are incurred.
There were no material receivables at December 31, 2018 or 2017 under these types of agreements. Advance receipts or other unearned
reimbursements are included in accrued liabilities on the accompanying balance sheet until earned.
options or stock appreciation rights issued to certain non-employees are recorded at their fair value as determined in accordance
with general accounting principles for share-based payments and accounting for equity instruments that are issued to other than
employees for acquiring, or in conjunction with selling, goods or services, and recognized over the service period. Deferred compensation
for options granted to non-employees is remeasured on a quarterly basis through the vesting or forfeiture date.
Company utilized the Black-Scholes valuation model to determine the fair value of share-based payments at the date of previously
issued grant using risk-free interest rate based on the Treasury yield on the date of the grant and expected volatility based
on the Company’s historical volatility over the expected term of the option. The resulting compensation expense is recognized
over the requisite service period, generally one to four years.
shares and units granted to employees are valued at the fair market value at the date of grant. The Company amortizes the amount
to expense over the service period on a straight-line basis for those shares with graded vesting. If the shares are subject to
performance objectives, the resulting compensation expense is amortized over the anticipated vesting period and is subject to
adjustment based on the actual achievement of objectives.
purchased by employees under the 2004 Employee Stock Purchase Plan were considered to be compensatory and were accounted for in
accordance with general accounting principles for share-based payments. Shares purchased by employees under the 2009 Employee
Stock Purchase Plan are considered to be non-compensatory.