On October 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. This new standard applies to contracts for the sale of products and services, and does not apply to contracts for the rental or lease of products. The Company adopted the new standard using the modified retrospective method applied to those contracts that were not completed as of September 30, 2018. Results for reporting periods beginning October 1, 2018 are presented under the new standard and prior period amounts were not restated.

Under the new standard, the Company recognizes revenue when performance of contractual obligations are satisfied, generally when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.

The Company primarily derives product revenue from the sale of its manufactured products. Revenue from these product sales, including the sale of used rental equipment, is recognized when obligations under the terms of a contract are satisfied, control is transferred and collectability of the sales price is probable. The Company assesses collectability during the contract assessment phase. In situations where collectability of the sales price is not probable, the Company recognizes revenue when it determines that collectability is probable or non-refundable cash is received from its customers. Transfer of control generally occurs with shipment or delivery, depending on the terms of the underlying contract. The Company’s products are generally sold without any customer acceptance provisions, and the Company’s standard terms of sale do not allow customers to return products for credit.

Revenue from engineering services is recognized as services are rendered over the duration of a project, or as billed on a per hour basis. Field service revenue is recognized when services are rendered and is generally priced on a per day rate.

The Company also generates revenue from short-term rentals under operating leases of its manufactured products. Rental revenue is recognized as earned over the rental period if collectability of the rent is reasonably assured. Rentals of the Company’s equipment generally range from daily rentals to minimum rental periods of up to six months or longer. The Company has determined that ASC 606 does not apply to rental contracts, which are within the scope of ASC Topic 842, Leases.

The cumulative effect of the changes made to the Company’s consolidated balance sheet as of October 1, 2018 resulting from the adoption of the new standard was not material and did not impact beginning retained earnings. The impact on the timing of sales and services for the fiscal year ended September 30, 2019 resulting from the application of the new standard was not material.

As permissible under the new standard, sales taxes and transaction-based taxes are excluded from revenue. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Additionally, the Company expenses costs incurred to obtain contracts when incurred because the amortization period would have been one year or less. These costs are recorded in selling, general and administrative expenses.

At March 31, 2020 and September 30, 2019, the Company had no deferred contract liabilities or deferred contract costs. During the three and six months ended March 31, 2020, the Company recognized no revenue or cost of revenue from deferred contract liabilities or deferred contract costs. During the three and six months ended March 31, 2019, the Company recognized revenue of $0.1 million from deferred contract liabilities and cost of revenue of $8,000 from deferred contract costs.

During the second quarter of fiscal year 2020, the Company partially financed a $12.5 million product sale by entering into a $10.0 million promissory note with the customer. The note is for a three-year term with monthly principal and interest payments of $0.3 million. Due to the financial condition of the customer, the Company has concerns over the probable collectability of the promissory note. As a result the Company has not recognized any revenue or cost of revenue on the product sale. The Company has received payments from the customer totaling $3.0 million as of March 31, 2020 related to the product sale, which is reflected on the Company’s consolidated balance sheet as non-current deferred revenue. Management does not intend to recognize revenue and cost of revenue from the sale until it becomes probable that the customer will satisfy its financial obligation to the Company.

For each of the Company’s operating segments, the following table presents revenue only from the sale of products and the performance of services under contracts with customers (in thousands). Therefore, the table excludes all revenue earned from rental contracts.

	Three Months Ended				Six Months Ended
	March 31, 2020		March 31, 2019		March 31, 2020		March 31, 2019
Oil and Gas Markets
Traditional exploration product revenue	$	1,257	$	3,261	$	3,587	$	5,987
Wireless exploration product revenue		479		310		883		454
Reservoir product revenue		337		994		517		1,882
Total revenue		2,073		4,565		4,987		8,323

Adjacent Markets
Industrial product revenue		4,186		4,120		7,782		7,682
Imaging product revenue		2,886		3,114		5,362		6,165
Total revenue		7,072		7,234		13,144		13,847

Emerging Markets
Revenue		372		46		469		134

Total	$	9,517	$	11,845	$	18,600	$	22,304

For each of the geographic areas where the Company operates, the following table presents revenue (in thousands) from the sale of products and services under contracts with customers. The table excludes all revenue earned from rental contracts:

	Three Months Ended				Six Months Ended
	March 31, 2020		March 31, 2019		March 31, 2020		March 31, 2019
Asia	$	830	$	1,510	$	1,275	$	3,068
Canada		794		342		1,267		630
Europe		1,259		1,170		2,672		2,085
United States		6,184		8,265		12,781		14,875
Other		450		558		605		1,646
Total	$	9,517	$	11,845	$	18,600	$	22,304

Revenue is attributable to countries based on the ultimate destination of the product sold, if known. If the ultimate destination is not known, revenue is attributable to countries based on the geographic location of the initial shipment.