Revenue Recognition  Effective January 1, 2018, we adopted Financial Accounting Standards Board (FASB) Topic 606, Revenue from Contacts with Customers (ASC 606). ASC 606 was applied using the modified retrospective method. Accordingly, comparative periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition (ASC 605). There was no cumulative effect of the initial application to be recognized as an adjustment to opening retained earnings at January 1, 2018 as the adoption did not have a material impact on the Companys results of operations or financial condition. ? The majority of our license fees and services revenue is generated from fixed-price contracts, this provides for licenses to our software products and services that customize such software to meet our customers needs. In most instances, customization services are determined to be essential to the functionality of the delivered software. Under ASC 606, revenue is recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on consideration specified in a contract with a customer and exclude any sales incentives. Furthermore, we recognize revenue when we satisfy a performance obligation by transferring control over the service to our customer. ? A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. Our customers typically receive the benefit of our services as they are performed. Substantially all customer contracts provide that we are compensated for services performed to date. Losses on fixed-price projects are recorded when identified. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. ? Nature of goods and services ? The following is a description of our products and services from which we generate revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: ? i. License Revenue ? License fees represent the fees we receive from the licensing of our software products. In most instances, customization services are determined to be essential to the functionality of the delivered software. The license along with the customization services are transferred to our customers over time. In arrangements where the services are not essential to the functionality of the delivered software, we recognize license revenue when the license agreement has been approved and the software has been delivered. We can identify each partys rights, payment terms, and commercial substance of the content. Where applicable, we identify multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their estimated allocated value. The selection of the method to measure progress towards completion requires judgment and is based on the extent of progress towards completion of the performance obligation. ? ii. Customer Support Revenue Customer support services includes annual support fees, recurring maintenance fees, warranty support fees and minor product upgrades. The warranty support fees represent a separate performance obligation that is provided for up to a year with initial license purchase. The Company allocates the contract transaction price related to warranty support fees based on pricing consistent with what we would offer to other market participants. Upon the conclusion of the warranty period, the customer can choose to continue to receive support and maintenance services via our customer support offerings. We recognize revenue from our support ratably over the service contract period. ? iii. Services Revenue ? We recognize revenue from fixed-price service contracts using the input method of accounting. Under the input method, revenue is recognized revenue on the basis of an entitys efforts or inputs toward satisfying a performance obligation. We recognize revenue from professional services provided pursuant to time-and-materials based contracts and training services as the services are performed, as that is when our performance obligation to our customers under such arrangements is fulfilled. ? iv. Managed Services ? We recognize revenue from our managed services contracts primarily over the service contract period. On occasion, our managed services contracts will contain a specified number of hours to work over the term of the contract. Revenue for this type of managed service contract is recognized using the input method of accounting, as previously described. ? Disaggregation of revenue ? In the following table, revenue is disaggregated by primary geographical market, major products/service lines, and timing of revenue recognition (in thousands): ? ? ? ? ? ? For the Three Months Ended September 30, For the Nine Months Ended September 30, ? 2018 2017 2018 2017 ? Primary geographical markets ? United Kingdom $ 1,512 $ 1,381 $ 4,945 $ 3,858 ? Other 5,908 6,166 18,770 15,786 ? $ 7,420 $ 7,547 $ 23,715 $ 19,644 ? ? Major products/service lines ? Licensing fees $ 255 $ 1,068 $ 839 $ 2,131 ? Customer support, including warranty support fees 2,481 2,343 7,602 6,380 ? Services 2,034 2,532 7,337 6,408 ? Managed services 2,650 1,604 7,937 4,725 ? Total services 7,165 6,479 22,876 17,513 ? $ 7,420 $ 7,547 $ 23,715 $ 19,644 ? ? Timing of revenue recognition ? Products transferred at a point in time $ 187 $ 109 $ 509 $ 710 ? Products and services transferred over time 7,233 7,438 23,206 18,934 ? $ 7,420 $ 7,547 $ 23,715 $ 19,644 ? ? ? ? Contract balances ? The following table provides information about receivables, assets, and liabilities from contracts with customers (in thousands): ? ? September 30, 2018 December 31, 2017 ? Assets ? Contract receivables, net $ 7,689 $ 10,151 ? Unbilled work-in-progress, net $ 3,880 $ 5,823 ? Liabilities ? Unearned revenue $ 4,720 $ 5,397 ? Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customers financial condition and collateral is not required. Unbilled work-in-progress is revenue which has been earned but not invoiced. The contract assets are transferred to the receivables when invoiced. ? The contract liabilities primarily relate to unearned revenue. Amounts billed in advance of performance obligations being satisfied are booked as unearned revenue. ? Transaction price allocated to the remaining performance obligations ? Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations with lives greater than one-year totals $2.0 million. The Company expects approximately 80% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 20% recognized thereafter. ? We apply the practical expedient in paragraph 606-10-50-14 and do not disclose information about remaining performance obligations that have original expected durations of one-year or less. We apply the transition practical expedient in paragraph 606-10-65-1(f)(3) and do not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when we expect to recognize that amount as revenue. Additionally, applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts (i.e., commissions) as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one-year or less.