Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 115

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 115
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 in time upon delivery.  Revenue allocated to the services is recognized over time using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted).  Revenue for the hardware is recognized at a point in time upon delivery.  Revenue for the software maintenance is recognized over time on a straight-line basis over the contract period.  •Subscription-based software consisting of a software license and software maintenance:  When subscription-based software is sold, the software license and software maintenance are generally considered distinct performance obligations.  The transaction price is allocated to software license and the software maintenance based on relative SSP.  We sell subscription-based software licenses for a fixed fee and/or a usage-based royalty fee, sometimes subject to a minimum guarantee.  When the amount is in the form of a fixed fee, including the guaranteed minimum in usage-based royalty, revenue is allocated to the software license recognized at a point in time upon delivery, provided all other revenue recognition criteria are met.  Any royalties not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as revenue when the subsequent usage occurs.  Revenue allocated to the software maintenance is recognized on a straight-line basis over the contract period.  ReturnsWe do not offer rights of return for our products and services in the normal course of business.Customer AcceptanceOur contracts with customers generally do not include customer acceptance clauses.Contract BalancesWhen the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual billing date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by deferred revenue until the performance obligation is satisfied.  Our contract assets consist of unbilled receivables. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue.

39

The following table presents changes in our contract assets and liabilities during the years ended December 31, 2024 and 2023 (in thousands): 

          Balance atBeginningof period

          RevenueRecognizedIn Advanceof Billings

          Billings

          Balance atEnd ofPeriod

          Year ended December 31, 2024

          Contract Assets:

          Unbilled receivables
           
          $
          1,401

          $
          3,558

          $
          (3,879
          )