Revenue from Contracts with Customers Revenue from Contracts with Customers
|12 Months Ended|
Dec. 31, 2019
|Revenue from Contract with Customer [Abstract]|
|Revenue from Contract with Customer [Text Block]||Revenue from Contracts with Customers
Revenue by Market
The table below presents disaggregated net revenues by market (in thousands):
(1) Due to the adoption of ASC 606 on January 1, 2018 using the modified retrospective method, amounts prior to 2018 have not been adjusted to reflect the change to recognize certain distributor sales upon sale to the distributor, or the sell-in method, from recognition upon the Company's sale to the distributors' end customers, or the sell-through method, which required the deferral of revenue and profit on such distributor sales.
Revenues from sales to the Company’s distributors accounted for 52%, 42% and 34% of net revenue for the years ended December 31, 2019, 2018 and 2017, respectively.
As of December 31, 2019 and 2018, customer contract liabilities consist of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $0.1 million and $0.1 million, respectively. Revenue recognized in the years ended December 31, 2019 and 2018 that was included in the contract liability balance as of the beginning of those respective years was immaterial.
There were no material changes in the contract liabilities balance during the years ended December 31, 2019 and 2018.
Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns
As of December 31, 2019 and 2018, obligations to customers consisting of estimates of price protection rights offered to the Company's end customers totaled $12.6 million and $16.5 million and are included in accrued price protection liability in the consolidated balance sheets. For activity in this account, including amounts included in net revenue, refer to Note 7. As of December 31, 2019 and 2018, other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer were $8.4 million and $7.6 million, respectively. As of December 31, 2019 and 2018, other obligations to customers representing estimates of stock rotation returns to be claimed by distributors on products sold were $1.4 million and $1.5 million, respectively. Obligations to customers for estimates of price adjustments and stock rotation return rights are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7). The increase in revenue in the years ended December 31, 2019 and 2018 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective years was not material.
As of December 31, 2019 and 2018, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $0.3 million and $0.3 million, respectively. Right of return assets are included in inventory in the consolidated balance sheets (Note 7).
As of December 31, 2019 and 2018, there were no impairment losses recorded on customer accounts receivable.
The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef