NOTE 2 – REVENUES FROM CONTRACTS WITH CUSTOMERS

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. Revenue is recognized net of revenue-based taxes assessed by governmental authorities.

The Company provides regulated and compliance services, which include the collection and processing of regulated and specialized waste for disposal, the collection of personal and confidential information for secure destruction, recall and returns (“Expert Solutions”) and communication services. The associated activities for each of these are a series of distinct services that are substantially the same and have the same pattern of transfer over time; therefore, the respective services are treated as a single performance obligation.

The Company recognizes revenue by applying the right to invoice practical expedient as our right to consideration corresponds directly to the value provided to the customer for performance to date. Revenues for our Medical Waste Solutions and Secure Information Destruction Services are recognized upon waste collection. Our Compliance Solution revenues are recognized over the contractual service period. Revenues from Hazardous Waste Solutions and Manufacturing and Industrial Services are recognized at the time the waste is received by a facility with an appropriate permit, either our processing facility or a third party. Revenues from Communication Services and Expert Solutions are recorded as the services are performed.

Our customers typically enter into a contract for the provision of services on a regular and scheduled basis, e.g. weekly, monthly or on an as needed basis over the contract term. Under the contract terms, the Company receives fees based on a monthly, quarterly or annual rate or fees based on contractual rates depending upon measures including the volume, weight and type of waste, number and size of containers collected, weight and type of shredded paper and number of call minutes.

Amounts are invoiced based on the terms of the underlying contract either on a regular basis, e.g., monthly or quarterly, or as services are performed and are generally due within a short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed.

Disaggregation of Revenues

The following table presents our revenues disaggregated by service and primary geographical regions, and includes a reconciliation of disaggregated revenue to revenue reported by our reportable segments, Domestic and Canada Regulated Waste and Compliance Services (“RCS”) and International RCS:

In millions
	Three Months Ended September 30, 2018
Reportable Segment	Domestic and Canada RCS				International RCS				All Other
Revenues by Service:	United States		Canada		Europe		Others		United States		Total
Medical Waste and Compliance Solutions	$	283.4	$	9.7	$	58.9	$	42.6	$	-	$	394.6
Secure Information Destruction Services		178.4		16.3		29.9		3.0		-		227.6
Manufacturing and Industrial Services		62.9		5.4		1.0		9.8		-		79.1
Hazardous Waste Solutions		82.0		-		-		-		-		82.0
Communication Services		-		3.5		4.0		-		37.2		44.7
Expert Solutions		-		2.7		1.9		-		22.3		26.9
Total	$	606.7	$	37.6	$	95.7	$	55.4	$	59.5	$	854.9

In millions
	Nine Months Ended September 30, 2018
Reportable Segment	Domestic and Canada RCS				International RCS				All Other
Revenues by Service:	United States		Canada		Europe		Others		United States		Total
Medical Waste and Compliance Solutions	$	860.5	$	29.4	$	189.2	$	143.7	$	-	$	1,222.8
Secure Information Destruction Services		528.3		49.1		91.0		9.1		-		677.5
Manufacturing and Industrial Services		186.8		16.6		15.9		33.8		-		253.1
Hazardous Waste Solutions		235.0		-		-		-		-		235.0
Communication Services		-		12.7		13.3		-		112.9		138.9
Expert Solutions		-		8.9		7.0		-		90.0		105.9
Total	$	1,810.6	$	116.7	$	316.4	$	186.6	$	202.9	$	2,633.2

Accounts Receivable

Accounts receivable are recorded when invoiced or when goods or services are provided. The carrying value of our receivables is presented net of an allowance for doubtful accounts.

We estimate our allowance for doubtful accounts based on past collection history and specific risks identified among uncollected amounts. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when our collection efforts have been exhausted.

Contract Liabilities

We record a contract liability when cash payments are received or due in advance of our services being performed. The majority of the contract liability is classified as current in Other current liabilities on the Condensed Consolidated Balance Sheets since amounts are generally earned in the subsequent quarter. The contract liability at September 30, 2018, June 30, 2018, and December 31, 2017 was $15.5 million, $17.4 million, and $17.9 million, respectively.

Contract Acquisition Costs

Our incremental direct costs of obtaining a contract, which consist primarily of sales incentives, are deferred and amortized to SG&A over the estimated period of benefit to be received from the cost, over a weighted average period of 6.3 years.

We had $7.7 million and $22.8 million of contract acquisition costs, related to deferred sales incentives included in Other current assets and Other assets, respectively, on the Condensed Consolidated Balance Sheet as of September 30, 2018. During the three and nine months ended September 30, 2018, we amortized $1.8 million and $5.0 million, respectively, of deferred sales incentives to SG&A.