Sale of Intellectual Property

9 Months Ended

Sep. 30, 2012

Sale of Intellectual Property [Abstract]

SALE OF INTELLECTUAL PROPERTY

13. SALE OF INTELLECTUAL PROPERTY:

In June 2012, Microsoft Corporation agreed to purchase Edgewater Fullscope’s Process Industries 2 (PI2) software and intellectual property (the “Assets”) for an aggregate of $3.25 million. Also, Microsoft has engaged Edgewater Fullscope in additional development and training services during the integration of the software module into Microsoft’s ERP solution for enterprises, Microsoft Dynamics AX (these services will be recognized as revenue on a time and materials basis concurrent with performance). We recognize revenue associated with the Microsoft PI2 Sale in direct proportion to the actual periodic services performed, as compared to the anticipated development services to be performed over the duration of the agreement. The agreement contains representations, warranties, covenants and indemnities, including an agreement by Edgewater Fullscope not to develop, promote, market or sell any software or technology that has the same or substantially similar, in any material respect, features or functions as the Assets or could replace, be used in lieu of or otherwise compete with such Assets.