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## 3. REVENUE RECOGNITION 

## Disaggregation of Revenue 

## COHERENT, INC. AND SUBSIDIARIES 

## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Based on the information that our chief operating decision maker ("CODM") uses to manage the business, we disaggregate revenue by type and market application within each segment. No other level of disaggregation is required considering the type of products, customers, markets, contracts, duration of contracts, timing of transfer of control and sales channels. 

The following tables summarize revenue from contracts with customers (in thousands): 

## Sales by revenue type and segment 

<img src='content_image/1021668.jpg'>

(2) 

Includes sales of spare parts, related accessories and other consumable parts as well as revenues from service agreements, of which $54.3 million for fiscal 2019 was recognized over time. 

## Sales by market application and segment 

<img src='content_image/1021672.jpg'>

See Note 17, "Segment and Geographic Information" for revenue disaggregation by reportable segment and geographic region. 

## Contract Balances 

We record accounts receivable when we have an unconditional right to the consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of customer deposits and deferred revenue, where we have unsatisfied or partly satisfied performance obligations. Contract liabilities classified as customer deposits are included in other current liabilities and contract liabilities classified as deferred revenue are included in other current liabilities or other long-term liabilities on our condensed consolidated balance sheets. Payment terms vary by customer. 

