REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts and Customers (the "new standard"), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under ASC Topic 605, Revenue Recognition (the "old standard").

The Company’s revenue accounting is similar under the old and new standards, and consequently, there was no opening adjustment to Retained Earnings. The Company did not have a difference in first quarter 2018 reported revenues based on the adoption of the new standard.

Revenue Recognition

Company sales revenue is recognized at a point in time, when control of products is transferred to customers based on contract terms. Transfer of control depends on contract terms and may be upon shipment from the Company’s facility, from a port near our facility, or upon delivery to customers.

Revenue is recognized when the performance obligation under the terms of a contract with customers are satisfied; generally, this occurs with the transfer of control of machines, workholding devices, parts, or completion of a service. There is typically one performance obligation associated with each contract. Contract terms may include down-payments at the time the order is placed, and at other times during fulfillment. However, these payments are financing in nature fulfilled in a year, and do not impact recognition policy. There are no contract assets, and accounts receivable are reported in the Company balance sheet. Contract liabilities are primarily for customer deposits, although there is an insignificant amount of deferred revenue and deferred installation in costs of sales.

The following table includes contract assets and liability balances and activity for the three months ended March 31, 2018 (in thousands):



	December 31, 2017		Additions	Deductions⁽¹⁾	March 31, 2018
Contract Assets	$	—	—	—	$	—

Contract Liabilities	$	25,459	15,584	15,198	$	25,844

⁽¹⁾ Included in this is $14.4 million of revenue and $0.8 million in cost of sales.