7. Contracts with Customers

The Company had contract assets and contract liabilities from customers of $1.4 million and $0.4 million, respectively, as of March 31, 2018. Upon adoption of ASC 606 as of January 1, 2018, the Company recorded contract assets and contract liabilities of $1.3 million and $0.1 million, respectively (see Note 2 – “Summary of Significant Accounting Policies” above for a further discussion on the adoption of ASC 606). Receivables from contracts with customers included in accounts receivable, net within the accompanying condensed consolidated balance sheet were $0.6 million and $0.3 million as of March 31, 2018 and January 1, 2018, respectively.

The contract assets relate to the Company’s right to consideration in exchange for the Company’s completed performance under the contract and granting the right to use the intellectual property, but not billed as of the reporting date. The contract assets are transferred to accounts receivable when the rights become unconditional. Receipt of payments from customers are based on minimum guarantee schedules as established in the contracts plus royalties earned on sales exceeding the minimum guarantee. The contract liabilities relate to the advance consideration received from customers for upfront license fees for which revenue is recognized on a straight-line basis over the term of the contract.

Significant changes in the contract assets and the contract liability balances during the three months ended March 31, 2018 are as follows (in thousands):


	Contract Assets		Contract Liabilities
Beginning balance at January 1, 2018	$	1,344	$	52
Revenue recognized from performance obligations satisfied in the current period		453		(3)
Transferred to accounts receivables from contract assets recognized at the beginning of the period		(380)		—
Contract liabilities recognized related to upfront license fees		—		300
Other		13		14
Ending balance at March 31, 2018	$	1,430	$	363

The Company evaluates contract assets and receivables from contracts with customers for impairment each period. There was no impairment of contract assets or receivables from contracts with customers during the three months ended March 31, 2018.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2018 (in thousands). Revenue expected to be recognized related to variable consideration for sales-based royalty promised in exchange for a license of intellectual property is not included in the table below. License arrangements in which royalty revenue is recognized based on actual sales end December 2023. Revenue recognized for variable consideration under license arrangements for the three months ended March 31, 2018 was $0.3 million.


	Remainder of
	2018		2019		2020		2021		2022		Total
Royalty license contracts with customers	$	1,571		1,767		1,729		1,034		283	$	6,384