the new guidance permits two methods of adoption : retrospectively to each prior reporting period presented ( full retrospective method ) , or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application ( modified retrospective method ) . we adopted the new guidance on january 1 , 2018 using the full retrospective method , which requires us to present our historical financial information for fiscal years 2016 and 2017 as if the new revenue guidance had been applied to all prior periods . the most significant impact of the standard relates to the timing of revenue recognition for software licenses sold with professional services where we did not have vendor specific objective evidence ( “ vsoe ” ) for professional services under current guidance . under the new standard , the requirement to have vsoe for undelivered elements is eliminated and we will recognize revenue for software licenses upon transfer of control to our customers . additionally , the new standard requires the capitalization and amortization of costs related to obtaining a contract , such as sales commissions , which are currently recorded as an expense to sales and marketing at the time they are incurred . 32 the adoption of the standard will result in the recognition of additional revenue of $ 2.7 million and $ 4.3 million for the years ended december 31 , 2017 and 2016 , respectively , an increase in gross profit of $ 2.7 million and $ 4.3 million for the years ended december 31 , 2017 and 2016 , respectively , an increase ( decrease ) in sales and marketing expense of $ 0.1 million and $ ( 1.5 ) million for the years ended december 31 , 2017 and 2016 , respectively , and a decrease in loss from operations of $ 2.6 million and $ 5.8 million for the years ended december 31 , 2017 and 2016 , respectively . in addition , the adoption of the standard will result in a decrease in total net deferred revenue of $ 7.8 million and $ 5.2 million as of december 31 , 2017 and 2016 , respectively , driven by the upfront recognition of software licenses sold with professional services for which we do not have vsoe , and an increase in total deferred commissions of $ 10.3 million and $ 10.4 million as of december 31 , 2017 and 2016 , respectively , which will be recognized in sales and marketing expense in future periods . the adoption of the standard will not have a significant impact to the provision for income taxes and will not have an impact on net cash from or used in operating , investing , or financing activities on our consolidated statements of cash flows . refer to note 1 in the notes to consolidated financial statements for the impact of adoption of the standard on the company 's consolidated balance sheets and consolidated statements of operations . components of operating results revenue . we generate revenue from the sale of products and services . as discussed further in the section titled “ critical accounting policies and estimates—revenue recognition ” below , revenue is recognized when persuasive evidence of an arrangement exists , delivery has occurred , the price is fixed or determinable and collection is reasonably assured . revenue is comprised of the following : product . our solutions include both hardware and software . we refer to hardware revenue as device revenue , which includes revenue from sales of our communication badges and badge accessories , which include batteries , battery chargers , lanyards , clips and other ancillary badge components as well as revenue from the resale of mc40 devices and related accessories . software revenue is derived primarily from the sale of perpetual licenses to our vocera communication and workflow system . we derive additional software revenue from the sale of term licenses and hosted software subscriptions , which can be renewed on a subscription basis . product revenue is generally recognized upon shipment of hardware and perpetual licenses and , in the case of term licenses or subscription services , ratably over the applicable term . service . we receive service revenue from sales of software maintenance , extended hardware warranties and professional services . software maintenance is typically invoiced annually in advance , recorded as deferred revenue , and recognized as revenue ratably over the service period . our professional services revenue is based on both time and materials , and fixed price contracts , and is recognized as the services are provided . extended warranties are invoiced in advance , recorded as deferred revenue , and recognized ratably over the extended warranty period . cost of revenue . cost of revenue is comprised of the following : cost of product . cost of product is comprised primarily of materials costs , software license costs , write-offs for excess and obsolete inventory , warranty , and manufacturing overhead costs for test engineering , material requirements planning and our shipping and receiving functions . these overhead costs also include facilities , equipment depreciation , amortization of developed technology and stock-based compensation expenses . we expect material costs to vary with the product life cycle of our devices . cost of service . cost of service is comprised primarily of employee wages , benefits and related personnel expenses of our technical support team , our professional consulting personnel and our training teams . cost of service also includes facility and information technology costs . we expect our cost of service will increase as we continue to invest in support services to meet the needs of our customer base . operating expenses . operating expenses are comprised of the following : research and development . story_separator_special_tag off-balance sheet arrangements during 2017 , we did not have any relationships with unconsolidated organizations or financial partnerships , such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes . 40 critical accounting policies and estimates the preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes . we evaluate our estimates on an ongoing basis , including those related to product warranties , goodwill and intangible assets , revenue recognition , stock-based compensation , accounting for business combinations and the provision for income taxes . we base our estimates and judgments on our historical experience , knowledge of factors affecting our business and our belief as to what could occur in the future considering available information and assumptions that we believe to be reasonable under the circumstances . the accounting estimates we use in the preparation of our consolidated financial statements will change as events occur , more experience is acquired , additional information is obtained and our operating environment changes . changes in estimates are made when circumstances warrant . such changes in estimates and refinements in estimation methodologies are reflected in our reported results of operations and , if material , the effects of changes in estimates are disclosed in the notes to our consolidated financial statements . by their nature , these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates . while our significant accounting policies are more fully described in note 1 of the “ notes to our consolidated financial statements ” included in item 8 , “ financial statements and supplementary data , ” we believe the following reflects our critical accounting policies and our more significant judgments and estimates used in the preparation of our financial statements . revenue recognition we derive revenue from the sales of communication badges , smartphones , perpetual software licenses for software that is essential to the functionality of the badges , software maintenance , extended warranty and professional services . we also derive revenue from the sale of licenses for software that is not essential to the functionality of the badges , which may include clinical integration and mobile application software as well as certain subscription-based revenues including vocera care experience . sales tax is excluded from reported total revenue . revenue is recognized when all of the below criteria are met : there is persuasive evidence that an arrangement exists , in the form of a written contract , amendments to that contract , or purchase orders from a third party ; delivery has occurred or services have been rendered ; the price is fixed or determinable after evaluating the risk of concession ; and collectability is reasonably assured based on customer creditworthiness and past history of collection . a typical sales arrangement involves multiple elements , such as sales of badges or smartphones , perpetual software licenses , professional services and maintenance services which entitle customers to unspecified upgrades , bug fixes , patch releases and telephone support . revenue from the sale of communication badges and perpetual software licenses is recognized upon shipment or delivery at the customers ' premises as the contractual provisions governing sales of these products do not include any provisions regarding acceptance , performance or general right of return or cancellation or termination provisions adversely affecting revenue recognition . revenue from the sale of maintenance services on software licenses is recognized over the period during which the services are provided , which is generally one year . revenue from professional services is recognized either on a fixed fee basis based on milestones or on a time and materials basis as the services are provided , both of which generally take place over a period of two to twelve weeks , but may take longer depending on the complexity of the work involved . we also derive revenue from the provision of hosted services on a subscription basis . revenue from these products is recognized ratably over the term of the arrangement . in arrangements with multiple deliverables , assuming all other revenue criteria are met , we recognize revenue for individual delivered items if they have value to the customer on a standalone basis . we allocate arrangement consideration at the inception of the arrangement to all deliverables using the relative selling price method . this method requires us to determine the selling price at which each deliverable could be sold if it were sold regularly on a standalone basis . when available , we use vendor-specific objective evidence ( vsoe ) of the selling price . vsoe represents the price charged for a deliverable when it is sold separately , or for a deliverable not yet being sold separately , the price established by management with the relevant authority . we have established vsoe of the selling price for our software maintenance . when vsoe of selling price is not available , third-party evidence ( tpe ) of selling price for similar products and services is acceptable ; however , our offerings and market strategy differ from those of our competitors , such that we can not obtain sufficient comparable information about third parties ' prices . if neither vsoe nor tpe are available , we use our best estimates of selling prices ( besp ) . we determine besp considering factors such as market conditions , sales channels , internal costs and product margin objectives and pricing practices . we regularly review and update our vsoe and besp information . 41 the relative selling price method allocates total arrangement consideration proportionally to each deliverable on the basis of its estimated selling price . in addition , the amount recognized for any delivered items can not exceed that

cash provided by operating activities was $ 7.7 million in 2017 , due in part to non-cash items such as stock-based compensation of $ 18.2 million and depreciation and amortization of $ 7.6 million for property and equipment and acquired intangible assets , partially offset by the 2017 net loss of $ 14.2 million . with respect to changes in assets and liabilities , cash was provided through a decrease of $ 1.4 million in inventory and a $ 8.7 million increase in deferred revenue . these factors were offset by certain cash outflows , including an increase in accounts receivable of $ 11.0 million , which is attributable to current period 's billings exceeding collection on prior periods ' invoices , an increase in prepaid expenses and other assets of $ 0.9 million , a decrease of $ 0.6 million in accounts payable and a decrease of $ 1.1 million in accrued payroll and other liabilities . cash provided by operating activities was $ 11.3 million in 2016 , due in part to non-cash items such as stock-based compensation of $ 12.0 million , $ 2.6 million in non-cash compensation expense and depreciation and amortization of $ 3.8 million for property and equipment and acquired intangible assets , partially offset by the 2016 net loss of $ 17.3 million . with respect to changes in assets and liabilities , cash was provided through a decrease of $ 0.1 million in other receivables , a $ 0.2 million increase in accounts payable , a $ 2.4 million increase in accrued liabilities and an $ 11.2 million increase in deferred revenue .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```cash provided by operating activities was $ 7.7 million in 2017 , due in part to non-cash items such as stock-based compensation of $ 18.2 million and depreciation and amortization of $ 7.6 million for property and equipment and acquired intangible assets , partially offset by the 2017 net loss of $ 14.2 million . with respect to changes in assets and liabilities , cash was provided through a decrease of $ 1.4 million in inventory and a $ 8.7 million increase in deferred revenue . these factors were offset by certain cash outflows , including an increase in accounts receivable of $ 11.0 million , which is attributable to current period 's billings exceeding collection on prior periods ' invoices , an increase in prepaid expenses and other assets of $ 0.9 million , a decrease of $ 0.6 million in accounts payable and a decrease of $ 1.1 million in accrued payroll and other liabilities . cash provided by operating activities was $ 11.3 million in 2016 , due in part to non-cash items such as stock-based compensation of $ 12.0 million , $ 2.6 million in non-cash compensation expense and depreciation and amortization of $ 3.8 million for property and equipment and acquired intangible assets , partially offset by the 2016 net loss of $ 17.3 million . with respect to changes in assets and liabilities , cash was provided through a decrease of $ 0.1 million in other receivables , a $ 0.2 million increase in accounts payable , a $ 2.4 million increase in accrued liabilities and an $ 11.2 million increase in deferred revenue .
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 Suspicious Activity Report : the new guidance permits two methods of adoption : retrospectively to each prior reporting period presented ( full retrospective method ) , or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application ( modified retrospective method ) . we adopted the new guidance on january 1 , 2018 using the full retrospective method , which requires us to present our historical financial information for fiscal years 2016 and 2017 as if the new revenue guidance had been applied to all prior periods . the most significant impact of the standard relates to the timing of revenue recognition for software licenses sold with professional services where we did not have vendor specific objective evidence ( “ vsoe ” ) for professional services under current guidance . under the new standard , the requirement to have vsoe for undelivered elements is eliminated and we will recognize revenue for software licenses upon transfer of control to our customers . additionally , the new standard requires the capitalization and amortization of costs related to obtaining a contract , such as sales commissions , which are currently recorded as an expense to sales and marketing at the time they are incurred . 32 the adoption of the standard will result in the recognition of additional revenue of $ 2.7 million and $ 4.3 million for the years ended december 31 , 2017 and 2016 , respectively , an increase in gross profit of $ 2.7 million and $ 4.3 million for the years ended december 31 , 2017 and 2016 , respectively , an increase ( decrease ) in sales and marketing expense of $ 0.1 million and $ ( 1.5 ) million for the years ended december 31 , 2017 and 2016 , respectively , and a decrease in loss from operations of $ 2.6 million and $ 5.8 million for the years ended december 31 , 2017 and 2016 , respectively . in addition , the adoption of the standard will result in a decrease in total net deferred revenue of $ 7.8 million and $ 5.2 million as of december 31 , 2017 and 2016 , respectively , driven by the upfront recognition of software licenses sold with professional services for which we do not have vsoe , and an increase in total deferred commissions of $ 10.3 million and $ 10.4 million as of december 31 , 2017 and 2016 , respectively , which will be recognized in sales and marketing expense in future periods . the adoption of the standard will not have a significant impact to the provision for income taxes and will not have an impact on net cash from or used in operating , investing , or financing activities on our consolidated statements of cash flows . refer to note 1 in the notes to consolidated financial statements for the impact of adoption of the standard on the company 's consolidated balance sheets and consolidated statements of operations . components of operating results revenue . we generate revenue from the sale of products and services . as discussed further in the section titled “ critical accounting policies and estimates—revenue recognition ” below , revenue is recognized when persuasive evidence of an arrangement exists , delivery has occurred , the price is fixed or determinable and collection is reasonably assured . revenue is comprised of the following : product . our solutions include both hardware and software . we refer to hardware revenue as device revenue , which includes revenue from sales of our communication badges and badge accessories , which include batteries , battery chargers , lanyards , clips and other ancillary badge components as well as revenue from the resale of mc40 devices and related accessories . software revenue is derived primarily from the sale of perpetual licenses to our vocera communication and workflow system . we derive additional software revenue from the sale of term licenses and hosted software subscriptions , which can be renewed on a subscription basis . product revenue is generally recognized upon shipment of hardware and perpetual licenses and , in the case of term licenses or subscription services , ratably over the applicable term . service . we receive service revenue from sales of software maintenance , extended hardware warranties and professional services . software maintenance is typically invoiced annually in advance , recorded as deferred revenue , and recognized as revenue ratably over the service period . our professional services revenue is based on both time and materials , and fixed price contracts , and is recognized as the services are provided . extended warranties are invoiced in advance , recorded as deferred revenue , and recognized ratably over the extended warranty period . cost of revenue . cost of revenue is comprised of the following : cost of product . cost of product is comprised primarily of materials costs , software license costs , write-offs for excess and obsolete inventory , warranty , and manufacturing overhead costs for test engineering , material requirements planning and our shipping and receiving functions . these overhead costs also include facilities , equipment depreciation , amortization of developed technology and stock-based compensation expenses . we expect material costs to vary with the product life cycle of our devices . cost of service . cost of service is comprised primarily of employee wages , benefits and related personnel expenses of our technical support team , our professional consulting personnel and our training teams . cost of service also includes facility and information technology costs . we expect our cost of service will increase as we continue to invest in support services to meet the needs of our customer base . operating expenses . operating expenses are comprised of the following : research and development . story_separator_special_tag off-balance sheet arrangements during 2017 , we did not have any relationships with unconsolidated organizations or financial partnerships , such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes . 40 critical accounting policies and estimates the preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes . we evaluate our estimates on an ongoing basis , including those related to product warranties , goodwill and intangible assets , revenue recognition , stock-based compensation , accounting for business combinations and the provision for income taxes . we base our estimates and judgments on our historical experience , knowledge of factors affecting our business and our belief as to what could occur in the future considering available information and assumptions that we believe to be reasonable under the circumstances . the accounting estimates we use in the preparation of our consolidated financial statements will change as events occur , more experience is acquired , additional information is obtained and our operating environment changes . changes in estimates are made when circumstances warrant . such changes in estimates and refinements in estimation methodologies are reflected in our reported results of operations and , if material , the effects of changes in estimates are disclosed in the notes to our consolidated financial statements . by their nature , these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates . while our significant accounting policies are more fully described in note 1 of the “ notes to our consolidated financial statements ” included in item 8 , “ financial statements and supplementary data , ” we believe the following reflects our critical accounting policies and our more significant judgments and estimates used in the preparation of our financial statements . revenue recognition we derive revenue from the sales of communication badges , smartphones , perpetual software licenses for software that is essential to the functionality of the badges , software maintenance , extended warranty and professional services . we also derive revenue from the sale of licenses for software that is not essential to the functionality of the badges , which may include clinical integration and mobile application software as well as certain subscription-based revenues including vocera care experience . sales tax is excluded from reported total revenue . revenue is recognized when all of the below criteria are met : there is persuasive evidence that an arrangement exists , in the form of a written contract , amendments to that contract , or purchase orders from a third party ; delivery has occurred or services have been rendered ; the price is fixed or determinable after evaluating the risk of concession ; and collectability is reasonably assured based on customer creditworthiness and past history of collection . a typical sales arrangement involves multiple elements , such as sales of badges or smartphones , perpetual software licenses , professional services and maintenance services which entitle customers to unspecified upgrades , bug fixes , patch releases and telephone support . revenue from the sale of communication badges and perpetual software licenses is recognized upon shipment or delivery at the customers ' premises as the contractual provisions governing sales of these products do not include any provisions regarding acceptance , performance or general right of return or cancellation or termination provisions adversely affecting revenue recognition . revenue from the sale of maintenance services on software licenses is recognized over the period during which the services are provided , which is generally one year . revenue from professional services is recognized either on a fixed fee basis based on milestones or on a time and materials basis as the services are provided , both of which generally take place over a period of two to twelve weeks , but may take longer depending on the complexity of the work involved . we also derive revenue from the provision of hosted services on a subscription basis . revenue from these products is recognized ratably over the term of the arrangement . in arrangements with multiple deliverables , assuming all other revenue criteria are met , we recognize revenue for individual delivered items if they have value to the customer on a standalone basis . we allocate arrangement consideration at the inception of the arrangement to all deliverables using the relative selling price method . this method requires us to determine the selling price at which each deliverable could be sold if it were sold regularly on a standalone basis . when available , we use vendor-specific objective evidence ( vsoe ) of the selling price . vsoe represents the price charged for a deliverable when it is sold separately , or for a deliverable not yet being sold separately , the price established by management with the relevant authority . we have established vsoe of the selling price for our software maintenance . when vsoe of selling price is not available , third-party evidence ( tpe ) of selling price for similar products and services is acceptable ; however , our offerings and market strategy differ from those of our competitors , such that we can not obtain sufficient comparable information about third parties ' prices . if neither vsoe nor tpe are available , we use our best estimates of selling prices ( besp ) . we determine besp considering factors such as market conditions , sales channels , internal costs and product margin objectives and pricing practices . we regularly review and update our vsoe and besp information . 41 the relative selling price method allocates total arrangement consideration proportionally to each deliverable on the basis of its estimated selling price . in addition , the amount recognized for any delivered items can not exceed that

