Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 604

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 8
Chunk 604
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 significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration
will require a significant amount of judgment. In estimating the transaction price, the Company will use either the expected value method
or the most likely amount method.

The
transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining
the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard
sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts
and variable consideration must also be considered. Allocating the transaction price can require significant judgement on the Company’s
part.

Revenue
is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides
guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is
satisfied over time, the related revenue is also recognized over time.

Product
Revenue

Product
revenue is primarily derived from sales of lidar hardware and systems. While each contract is individually assessed to identify separate
performance obligations, a performance obligation generally consists of an individual sensor or sensor system, inclusive of all materials
and integrated software. Transaction prices are normally fixed, as the Company does not include variable consideration or the exchange
of any other goods as part of the contract. Revenue is recognized upon shipment of the product to the customer, as control and title
of the product passes to the customer at the point of shipment. Product sales generally include acceptance provisions, however, as it
can be objectively determined that agreed-upon customer specifications have been met prior to shipment, control of the item passes at
the time of shipment.

License
and Royalty Revenue

License
and royalty revenue consists of revenue from the licensing of various software and intellectual property owned by MicroVision, and any
royalties generated from their use in products sold by customers.

Software
licenses sold are either a license to install and use, whether perpetual or fixed-term, or a license to access the software, which is
normally a volume-based license. Revenue from licenses to install is recognized at the point when the customer is granted the ability
to install the software, as these licenses represent functional intellectual property with significant standalone functionality. Revenue
from licenses to access is recognized over the period of time in which the Company has ongoing obligations under the agreement, as