Deferred Costs and Other Contract Assets

12 Months Ended

Jan. 02, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Deferred Costs and Other Contract Assets

7. Deferred Costs and Other Contract Assets

Deferred costs and other contract assets consist of the following (in thousands):

	January 2, 2021		December 28, 2019
Deferred commissions	$	7,477	$	5,260
Prepaid contract allowances	7,336		8,098
Unbilled contract receivables	3,925		2,482
Equipment leased to customers, net(1)	1,338		374
Deferred costs and other contract assets	$	20,076	$	16,214

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(1)     Formerly titled “Deferred cost of goods sold”. In connection with its adoption of ASC 842 on December 30, 2018, the Company recorded a reduction to equipment leased to customers, net, of $103.5 million as a result of the reclassification of certain embedded leases within the Company’s deferred equipment agreements with its customers from operating to sales-type leases. See “Recently Adopted Accounting Pronouncements” under Note 2 to these consolidated financial statements for additional information related to the Company’s adoption of ASC 842.

For the years ended January 2, 2021, December 28, 2019, and December 29, 2018, $0.4 million, $1.0 million and $30.0 million, respectively, of equipment leased to customers was amortized to cost of goods sold. As of January 2, 2021 and December 28, 2019, accumulated amortization of equipment leased to customers was $0.9 million and $0.7 million, respectively.