Accounts receivable are recorded at invoiced amounts 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 records allowances for credit losses and credit allowances that reduce the value of accounts receivable to fair value.

Effective January 1, 2020, the Company adopted ASU 2016-13. This ASU replaces the incurred loss impairment model with an expected loss impairment model for financial instruments, including accounts receivable. The amendment requires entities to consider forward-looking information to estimate expected credit losses. The Company did not record an adjustment upon adoption of ASU 2016-13.

The Company is exposed to credit losses primarily through the sale of products. The Company’s expected loss methodology for accounts receivable is developed using historical collection experience, current and future economic market conditions, and a review of the current status of customers’ trade accounts receivable. Due to the short-term nature of accounts receivable, the estimate of amount of accounts receivable that may not be collected is based on aging of the account receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. However, the Company has adjusted terms for a few of its customers and it may experience delays with collections due to the COVID-19 pandemic. The Company’s allowance for credit losses was $0.1 million at September 30, 2020 and at December 31, 2019. During the nine months ended September 30, 2020, the Company received $0.2 million pursuant to a settlement for a customer accounts receivable balance that was written off in 2018.

The following table summarizes the allowance for credit losses activity during the nine months ended September 30, 2020:

Inventories are stated at the lower of cost or net realizable value and include material, labor and overhead costs using the first-in, first-out method of costing. Inventories as of September 30, 2020 and December 31, 2019 were composed of raw materials, work-in-process and finished goods. The Company had consigned inventory with customers of $0.2 million and $0.3 million at September 30, 2020 and December 31, 2019, respectively. The Company records allowances to reduce the value of inventory to the lower of cost or net realizable value, including allowances for excess and obsolete inventory. Reserves for excess inventory are calculated based on an estimate of inventory in excess of normal and planned usage. Obsolete reserves are based on the identification of inventory where the carrying value is above net realizable value. The allowance for inventory losses was $3.8 million and $3.4 million at September 30, 2020 and at December 31, 2019, respectively.

	September 30, 2020		December 31, 2019
Raw materials	$	5,832	$	6,502
Work-in-process		966		913
Finished goods		3,492		4,520
Inventories, net	$	10,290	$	11,935

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

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 and software licenses 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.

	September 30, 2020			December 31, 2019
Building	$	6,880		$	6,389
Computers and office equipment		9,966			9,847
Manufacturing and test equipment		15,398			14,192
Furniture and fixtures		1,440			1,314
Leasehold improvements		3,067			2,850
Motor vehicles		20			20
Total property and equipment		36,771			34,612
Less: Accumulated depreciation and amortization		(25,813	)		(24,397	)
Land		1,770			1,770
Property and equipment, net	$	12,728		$	11,985

Depreciation and amortization expense were approximately $0.8 million and $0.7 million for the three months ended September 30, 2020 and 2019, respectively. Depreciation and amortization expense were approximately $2.3 million and $2.1 million for the nine months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2020, the Company disposed of $0.9 million of fully depreciated property and equipment. Amortization for finance leases is included in depreciation and amortization expense. See Note 10 for information related to finance leases.

	September 30, 2020		December 31, 2019
Inventory receipts	$	2,524	$	1,431
Payroll and other employee benefits		1,169		1,605
Paid time off		1,146		855
Employee stock purchase plan		419		228
Professional fees and contractors		416		246
Deferred revenues		255		241
Warranties		250		444
Operating leases		177		282
Income and sales taxes		182		133
Real estate taxes		116		152
Customer refunds for estimated returns		109		147
Finance leases		71		77
Restructuring		4		45
Short-term incentive plan		0		2,553
Leasehold improvements		0		702
Other		256		241
Total	$	7,094	$	9,382

	September 30, 2020		December 31, 2019
Operating leases	$	4,028	$	3,021
Deferred payroll taxes		318		0
Finance leases		111		164
Deferred revenue		83		119
Other		17		11
Total	$	4,557	$	3,315