|9 Months Ended|
Sep. 30, 2021
Disaggregation of Revenue
Total revenues consisted of the following:
Revenue from Divested Businesses
There were no divestitures during the three and nine months ended September 30, 2021, or the three months ended September 30, 2020. Total revenue reported includes revenue from divested businesses of $4.3 million for the nine months ended September 30, 2020, respectively.
Contracts with Customers
Contract Assets - Insurance Commissions Receivable
A summary of the activity impacting the contract assets during the nine months ended September 30, 2021 is presented below:
As of September 30, 2021, $278 of contract assets are expected to be collected within the next 12 months and therefore are included in current accounts receivable on the condensed consolidated balance sheets. The remaining $7,159 of contract assets are expected to be collected in the following periods and are included in long-term insurance commissions receivable on the condensed consolidated balance sheets.
Contract Liabilities — Refundable Customer Deposits
In September 2019, the Company entered into a Lead Buyer Agreement with a customer (“Buyer”) that provides residential security systems. Under the Lead Buyer Agreement, the Buyer pays the Company a referral fee for leads resulting in completed installations of certain residential security systems. At inception of this agreement, the Buyer made a prepayment of $7,000, which is to be credited over the term from October 2019 to September 2022, from earned referral fees for leads provided by the Company. This prepayment represents a contract liability since it is an advanced deposit for services the Company has yet to provide.
A summary of the activity impacting the contract liabilities during the nine months ended September 30, 2021 is presented below:
As of September 30, 2021, $1,509 of contract liabilities are expected to be transferred to revenue within the next 12 months and therefore are included in current refundable customer deposits on the unaudited condensed consolidated balance sheets.
Timing may differ between the satisfaction of performance obligations and collection of amounts from customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent the amounts relate to services or coverage performed by the Company over time, these liabilities are classified as deferred revenue. If the amounts collected related to a point in time obligation which has yet to be performed, these liabilities are classified as refundable customer deposits.
A summary of the activity impacting deferred revenue balances during the nine months ended September 30, 2021 is presented below:
Deferred revenue presented on the Company’s condensed consolidated balance sheet includes deferred revenue related to the Company’s insurance operations of $172.7 million and $13.6 million of unearned premiums and unearned ceding commissions, respectively. Deferred revenue of $3.8 million is related to the Company’s Vertical Software segment operations.
Remaining Performance Obligations
Contracts with customers include $3.8 million to performance obligations that will be satisfied at a later date. These amounts primarily include performance obligations that are recorded in the condensed consolidated balance sheets as deferred revenue. The amount of the transaction price allocated to performance obligations to be satisfied at a later date,
which is not recorded in the condensed consolidated balance sheets, is immaterial as of September 30, 2021 and December 31, 2020.
The Company has applied the practical expedients provided for in the accounting standards, and does not present unsatisfied performance obligations for (i) contracts with an original expected length ofor less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Additionally, the Company excludes amounts related to performance obligations that are billed and recognized as they are delivered.
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