6. Balance Sheet Information

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at invoiced amount with standard net terms that range between 30 and 90 days. The Company extends credit to its customers based on an evaluation of a customer’s financial condition and collateral is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on the Company’s assessment of known delinquent accounts, historical experience, and other currently available evidence of the collectability and the aging of accounts receivable. The Company’s allowance for doubtful accounts was $0.1 million at September 30, 2015 and at December 31, 2014. The provision for doubtful accounts is included in sales and marketing expense in the condensed consolidated statements of operations.

Inventories

Inventories are stated at the lower of cost or market and include material, labor and overhead costs using the first-in, first-out (“FIFO”) method of costing. Inventories as of September 30, 2015 and December 31, 2014 were composed of raw materials, sub-assemblies, finished goods and work-in-process. The Company had consigned inventory with customers of $0.7 million and $0.8 million at September 30, 2015 and December 31, 2014, respectively. The Company records allowances to reduce the value of inventory to the lower of cost or market, including allowances for excess and obsolete inventory. The allowance for inventory losses was $1.9 million at September 30, 2015 and $1.8 million at December 31, 2014.

Inventories consisted of the following:


	September 30, 2015		December 31, 2014
Raw materials	$	10,713	$	10,160
Work in process		1,108		915
Finished goods		5,366		5,283

Inventories, net	$	17,187	$	16,358

Prepaid and Other Current Assets

Prepaid assets are stated at cost and are amortized over the useful lives (up to one year) of the assets.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer equipment over three to five years, office equipment, manufacturing and test equipment, and motor vehicles over five years, furniture and fixtures over seven years, and buildings over 30 years. Leasehold improvements are amortized over the shorter of the corresponding lease term or useful life. Depreciation expense and gains and losses on the disposal of property and equipment are included in cost of sales and operating expenses in the condensed consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Property and equipment consisted of the following:


	September 30, 2015			December 31, 2014
Building	$	6,231		$	6,229
Computers and office equipment		10,816			10,435
Manufacturing and test equipment		12,720			11,880
Furniture and fixtures		1,275			1,214
Leasehold improvements		875			909
Motor vehicles		42			117

Total property and equipment		31,959			30,784
Less: Accumulated depreciation and amortization		(19,687	)		(17,712	)
Land		1,770			1,770

Property and equipment, net	$	14,042		$	14,842

Depreciation and amortization expense was approximately $0.8 million and $0.7 million for the three months ended September 30, 2015 and 2014, respectively, and $2.3 million and $2.1 million for the nine months ended September 30, 2015 and 2014, respectively. Amortization for capital leases is included in depreciation and amortization expense. See Note 10 for information related to capital leases.

Liabilities

Accrued liabilities consisted of the following:


	September 30,		December 31,
	2015		2014
Inventory receipts	$	1,626	$	2,471
Paid time off		1,338		1,247
Payroll, bonuses, and other employee benefits		991		1,539
Due to Nexgen Parties - working capital adjustment		840		0
Professional fees and contractors		403		223
Warranties		381		304
Deferred revenues		218		1,262
Real estate taxes		121		181
Income and sales taxes		157		266
Employee stock purchase plan		97		314
Executive deferred compensation		0		2,043
Other		258		361

Total	$	6,430	$	10,211

Long-term liabilities consist of the following:


	September 30,		December 31,
	2015		2014
Due to Nexgen Parties - contingent consideration	$	500	$	0
Deferred rent		263		258
Long-term obligations under capital leases		128		135
Deferred revenues		39		55

	$	930	$	448