Company: IDCC
Filing Date: 2025-02-06
Form Type: 10-K
Source: 0001405495-25-000011
Chunk: 94

Company: InterDigital, Inc.
Filing Date: 2025-02-06
Form: 10-K
Item: Item 7
Chunk 94
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In 2024, we incurred $1.0 million of nonrecurring share-based compensation costs driven by licensing successes.

Non-Operating Income (Expense), Net

•In 2024, we recognized $2.0 million of net gains resulting from observable price changes of our long-term strategic investments, which was included within “Other income (expense), net” in the consolidated statement of income.

Critical Accounting Policies and Estimates

Our consolidated financial statements are based on the selection and application of GAAP, which require us to make estimates and assumptions that affect the amounts reported in both our consolidated financial statements and the accompanying notes.  Future events and their effects cannot be determined with absolute certainty.  Therefore, the determination of estimates requires the exercise of judgment.  Actual results could differ from these estimates and any such differences may be material to the financial statements.  Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance" within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.  We believe the accounting policies that are of particular importance to the portrayal of our financial condition and results and that may involve a higher degree of complexity and judgment in their application compared to others are those relating to revenue recognition, compensation, and income taxes.  If different assumptions were made or different conditions existed, our financial results could have been materially different.

    Revenue Recognition

We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depend upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations.  Such agreements are often complex and include multiple performance obligations. These agreements can include, without limitation, performance obligations related to the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a portfolio of technology at a point in time along with promises to provide any technology updates to the portfolio during the term. 

In accordance with GAAP, we use a five-step model to achieve the core underlying principle that an entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction