Note 7 — Balance Sheet Details

Accounts Receivable

The components of accounts receivable are as follows (in thousands):


	December 31,		September 30,
	2018		2018

Accounts receivable
Billed	$	119,943	$	156,948
Unbilled		—		242,877
Allowance for doubtful accounts		(1,652)		(1,324)
Total accounts receivable		118,291		398,501
Less estimated amounts not currently due		—		(6,134)
Current accounts receivable	$	118,291	$	392,367

Inventories

Inventories consist of the following (in thousands):


	December 31,		September 30,
	2018		2018

Finished products	$	7,716	$	7,099
Work in process and inventoried costs under long-term contracts		49,295		63,169
Materials and purchased parts		35,190		23,710
Customer advances		—		(9,779)
Net inventories	$	92,201	$	84,199

At both December 31, 2018 and September 30, 2018, work in process and inventoried costs under long-term contracts includes approximately $0.9 million in costs incurred outside the scope of work or in advance of a contract award. We believe it is probable that we will recover the costs inventoried at December 31, 2018, plus a profit margin, under contract change orders or awards within the next year.

Capitalized Software

We capitalize certain costs associated with the development or purchase of internal-use software. The amounts capitalized are included in property, plant and equipment in our Condensed Consolidated Balance Sheets and are amortized on a straight-line basis over the estimated useful life of the software, which ranges from three to seven years. No amortization expense is recorded until the software is ready for its intended use.

As a part of our efforts to upgrade our current information systems, early in fiscal 2015 we purchased new enterprise resource planning (ERP) software and began the process of designing and configuring this software and other software applications to manage our operations. Various components of our ERP system became ready for their intended use and were placed into service in phases from fiscal 2016 through fiscal 2018. As each component became ready for its intended use, the component’s costs were transferred into completed software and we began amortizing these costs over their seven-year estimated useful life.

Excluding businesses that we acquired in fiscal 2019, we completed the planned implementation of our ERP system in the fourth quarter of fiscal 2018. We continue to capitalize costs associated with the development of certain ERP features and upgrades that are not yet ready for their intended use. We capitalized costs related to ERP components in development totaling $0.5 million and $2.5 million for the quarters ended December 31, 2018 and 2017, respectively.

In addition to software costs that were capitalized, during the quarters ended December 31, 2018 and December 31, 2017, we recognized expenses related to the development and implementation of our ERP system of $0.8 million and $6.3 million, respectively, for costs that did not meet the requirements for capitalization. Amounts that were expensed in connection with the development and implementation of these systems are classified within selling, general and administrative expenses in the Condensed Consolidated Statements of Income (Loss).

Deferred Compensation Plan

We have a non-qualified deferred compensation plan offered to a select group of highly compensated employees. The plan provides participants with the opportunity to defer a portion of their compensation in a given plan year. The liabilities associated with the non-qualified deferred compensation plan are included in other long-term liabilities in our Condensed Consolidated Balance Sheets and totaled $12.0 million and $11.5 million at December 31, 2018 and September 30, 2018, respectively.

We have made contributions to a rabbi trust to provide a source of funds for satisfying a portion of these deferred compensation liabilities. The total carrying values of assets set aside to fund deferred compensation liabilities as of December 31, 2018 and September 30, 2018 were $5.8 million and $6.4 million, respectively, which were comprised entirely of life insurance contracts. The carrying value of the life insurance contracts is based on the cash surrender value of the policies. Changes in the carrying value of the deferred compensation liability, and changes in the carrying value of the assets held in the rabbi trust are reflected in our Condensed Consolidated Statements of Income (Loss).