Note 3—Revenue

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance was effective as of January 1, 2018 and was applied on a modified retrospective basis. The Company elected the practical expedient and only evaluated contracts for which substantially all revenue had not been recognized under ASC 605 with the cumulative effect of the new guidance recorded as of the date of initial application. The impact of adoption was an increase to beginning retained earnings of $6.1 million, net of $2.1 million related to taxes. The adoption impact was primarily due to the change in license revenue being recognized at a point in time under ASC 606 rather than over time as it was recognized under ASC 605. The difference between ASC 606 and ASC 605 was not material to the year ended December 31, 2018.

The following table presents the Company’s revenues by Group for the year ended December 31, 2018 (dollars in millions):


	2018
Revenue by Group:
Bruker BioSpin	$	591.1
Bruker CALID		547.8
Bruker Nano		568.1
BEST		194.8
Eliminations		(6.2)
Total revenue	$	1,895.6

Revenue for the Company recognized at a point in time versus over time is as follows for the year ended December 31, 2018 (dollars in millions):


	2018
Revenue recognized at a point in time	$	1,716.8
Revenue recognized over time		178.8
Total revenue	$	1,895.6

Remaining Performance Obligations

Remaining performance obligations represent the aggregate transaction price allocated to a promise to transfer a good or service that is fully or partially unsatisfied at the end of the period. As of December 31, 2018, remaining performance obligations were approximately $1,054.4 million. The Company expects to recognize revenue on approximately 84.3% of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s consolidated balance sheets.

Contract assets—Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Billing often occurs subsequent to revenue recognition, resulting in contract assets. Contract assets are generally classified as other current assets in the consolidated balance sheets. The balance of contract assets as of December 31, 2018 and January 1, 2018, the date of adoption of ASC 606, was $25.9 million and $12.8 million, respectively. The increase in the contract asset balance during the twelve-month period ended December 31, 2018 is primarily a result of foreign currency translation and contracts that have been recognized as revenue during the twelve month period ending December 31, 2018 for which billing cannot contractually occur as of December 31, 2018.

Contract liabilities—The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the consolidated balance sheet based on the timing of when revenue recognition is expected. As of December 31, 2018 and January 1, 2018, the date of adoption of ASC 606, contract liabilities were $288.5 million and $291.3 million, respectively. The decrease in the contract liability balance during the twelve-month period ended December 31, 2018 is primarily a result of satisfying performance obligations and foreign currency translation which were offset in part by new cash payments received and additions due to recent acquisitions. Approximately $171.0 million of the contract liability balance on January 1, 2018, the date of adoption of ASC 606, was recognized as revenue during the twelve-month period ended December 31, 2018.