2. Revenue from Contracts with Customers

As of January 1, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified ASC 606. While only a portion of the Company’s revenues is impacted by this guidance as it does not apply to contracts falling under the leasing standard, as part of the implementation process the Company performed an analysis to identify accounting policies that needed to change and additional disclosures that are required. The Company considered factors such as customer contracts with unique revenue recognition considerations, the nature and type of goods and services offered, the degree to which contracts include multiple performance obligations or variable consideration, and the pattern in which revenue is currently recognized, among other things. All revenue streams applicable to the new standard (Spare parts and equipment sales and Managed services which is reflected within Other revenue) were evaluated by management. The Company considered recognition under the new standard and concluded the timing of the Company’s revenue recognition will remain the same. Additionally, the Company determined the transfer of engines and airframes from the lease portfolio to the Spare Parts segment for part out represent sales to customers in accordance with the ordinary operations of our Spare Parts reportable segment. As such, the Company presents the sale of these assets on a gross basis and have reclassified the revenue on sale to the Spare parts and equipment sales line item from the net gain (loss) presentation within the Gain on sale of leased equipment line item.

The following tables summarize the impacts to each financial statement line item affected by the adoption of ASC Topic 606 as of and for the year ended December 31, 2018 (in thousands):


Consolidated Balance Sheet Line Items
	Impact of changes in accounting policies
			Balances without adoption		Impact of adoption:
December 31, 2018	As reported		of ASC Topic 606		Higher/(Lower)
Equipment held for sale	$	789	$	23,733	$	(22,944)
Spare parts inventory	$	48,874	$	25,930	$	22,944

Consolidated Statement of Income Line Items
	Impact of changes in accounting policies
			Balances without adoption		Impact of adoption:
For the year ended December 31, 2018	As reported		of ASC Topic 606		Higher/(Lower)
Revenue:
Spare parts and equipment sales	$	71,141	$	54,749	$	16,392
Gain on sale of leased equipment	$	6,944	$	7,644	$	(700)
Expenses:
Cost of spare parts and equipment sales	$	61,025	$	45,333	$	15,692
Net income	$	43,231	$	43,231	$	—
Net income attributable to common shareholders	$	39,898	$	39,898	$	—

In addition the change in presentation of certain spare parts sales noted above has caused proceeds from sale of such parts to be recorded in cash flows from operating activities having previously been recorded as sale proceeds within investing activities. This caused an increase in cash flows from operating activities of $16.9 million in the year ended December 31, 2018 and an equal decrease in proceeds from sale of equipment within investing activities.

The following table disaggregates revenue by major source for the year ended December 31, 2018 (in thousands):


	Leasing and
Year ended December 31, 2018	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Leasing revenue (2)	$	265,894	$	—	$	—	$	265,894
Gain on sale of leased equipment		6,944		—		—		6,944
Spare parts and equipment sales		30,122		41,019		—		71,141
Managed services		4,303		—		—		4,303
Other revenue		—		1,727		(1,662)		65
Total revenue	$	307,263	$	42,746	$	(1,662)	$	348,347

(1)

Represents revenue generated between our reportable segments.

(2)

Leasing revenue is recognized under the lease accounting guidance in ASC 840 Leases, and therefore qualifies for the scope exception under ASC 606. Total Leasing revenue includes $3.3 million that is presented in Other revenue line item on the Consolidated Statement of Income.