Company: VSAT
Filing Date: 2025-02-11
Form Type: CORRESP
Source: 0001193125-25-024360
Chunk: 5

Company: VIASAT INC
Filing Date: 2025-02-11
Form: CORRESP
Chunk 5
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 as royalties related to past sales, recovery of legal fees, or damages (punitive or otherwise). If the settlement includes both components in the scope of the revenue standard and components in the scope of other standards, the reporting entity should generally allocate consideration received to the various components on a relative standalone selling price basis.

Accordingly, we reviewed the Acacia Payments and related court rulings to identify all of the components of the litigation settlements, noting:

| • |     | that each party was responsible for each party’s respective legal expenses, thus concluded that the 
 settlement payments did not constitute compensation for Viasat’s legal expenses incurred,           |

| • |     | that final settlement amounts were calculated and based on the underlying terms of the agreements for prior 
 periods and related royalties earned under the Acacia Contract, and                                         |

| • |     | there was no additional court based punitive damage component. |

Thus, we concluded that the entirety of the Acacia Payments were within the scope of ASC 606 as they were compensation under the terms of the Acacia Contract and were in exchange for goods or sevices that were the output of Viasat’s ongoing central operations. We further considered whether a significant financing component exists and whether a portion of the payment represents interest income, given the length of time between when the royalty revenues were incurred and when the Acacia Payments were made. ASC 606-10-32requires consideration of a financing component as a part of determining the transaction price when the timing of payments provides a significant benefit of financing to the customer.While the Acacia Payments did not have an explicit financing component, the time between when consideration was paid and when the contractual benefits under the Acacia Contract were received from Viasat (i.e. royaties were incurred during 2019 and forward) provided Acacia with a significant benefit of financing. As such, we determined that a portion of the Acacia Payments related to contractual consideration for prior years should be adjusted to reflect the time value of money (interest). ASC 606-10-32-19provides the following guidance regarding calculating interest related to a significant financing component: To meet the objective in paragraph 606-10-32-16when adjusting the promised amount of consideration for a significant financing component, an entity shall use the discount rate that would be reflected in a separate financing transaction between the entity and its customer at contract inception. That rate would reflect the credit characteristics of the party receiving financing in the contract, as well as any collateral or security provided by the customer or