2. Revenue Recognition

On January 1, 2017, we adopted ASU 2014-09, “Revenue from Contracts with Customers” (“Topic 606”), applying the modified retrospective method to all contracts that were not completed as of that date. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while prior period results are not adjusted and continue to be reported under the accounting standards in effect for the prior period. We recorded an increase to opening equity of $404,000 as of January 1, 2017 due to the cumulative impact of adopting Topic 606.

Disaggregation of revenue

The following table provides information about disaggregated revenue by primary geographical market and includes a reconciliation of the disaggregated revenue with reportable segments (in thousands):

	Three Months Ended September 30, 2018								Three Months Ended September 30, 2017
	Third-Party Software		Proprietary Software		Professional Engineering Service		Total		Third-Party Software		Proprietary Software		Professional Engineering Service		Total
Primary geographical markets:
North America	$	13,715	$	288	$	1,438	$	15,441	$	15,615	$	532	$	1,835	$	17,982
Europe		526		2		146		674		520		—		276		796
Asia		—		506		73		579		105		668		102		875
Total	$	14,241	$	796	$	1,657	$	16,694	$	16,240	$	1,200	$	2,213	$	19,653

	Nine Months Ended September 30, 2018								Nine Months Ended September 30, 2017
	Third-Party Software		Proprietary Software		Professional Engineering Service		Total		Third-Party Software		Proprietary Software		Professional Engineering Service		Total
Primary geographical markets:
North America	$	45,115	$	2,236	$	5,558	$	52,909	$	46,867	$	3,650	$	6,963	$	57,480
Europe		1,821		107		574		2,502		1,380		—		1,053		2,433
Asia		361		529		274		1,164		295		685		449		1,429
Total	$	47,297	$	2,872	$	6,406	$	56,575	$	48,542	$	4,335	$	8,465	$	61,342

Contract balances

We receive payments from customers based upon contractual billing schedules; accounts receivable is recorded when the right to consideration becomes unconditional. Contract assets include amounts related to our contractual right to consideration for completed performance obligations not yet invoiced and deferred contract acquisition costs, which are amortized over time as the associated revenue is recognized. Contract liabilities, presented as deferred revenue on our condensed consolidated balance sheets, include payments received in advance of performance under the contract and are realized when the associated revenue is recognized. We had no asset impairment charges related to contract assets for each of the three and nine months ended September 30, 2018 and 2017.

Significant changes in the contract assets and the deferred revenue balances during the nine months ended September 30, 2018 were as follows (in thousands):

	Nine Months Ended September 30, 2018
	Contract Assets		Deferred Revenue
Revenue recognized that was included in deferred revenue at December 31, 2017	$	—	$	2,847
Transferred to receivables from contract assets recognized at December 31, 2017		263		—

Contract acquisition costs

We capitalize contract acquisition costs for contracts with a term exceeding one year, as is more common with our DataV software bookings. Amortization of contract acquisition costs was $7,000 and $12,000 for the three months ended September 30, 2018 and 2017, respectively, and was $93,000 and $160,000 for the nine months ended September 30, 2018 and 2017, respectively. There were no asset impairment charges for contract acquisitions costs for any of the periods noted above.

For contracts that have a duration of less than one year, we apply a practical expedient and fully expense these costs as incurred.

Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands). The estimated revenue does not include contracts with original durations of one year or less, amounts of variable consideration attributable to royalties, or contract renewals that are unexercised as of September 30, 2018:

	Remainder of 2018		2019		2020		2021
Third-party software	$	24	$	50	$	14	$	—
Proprietary software		853		1,827		1,802		687
Professional engineering service		230		—		—		—

Practical expedients and exemptions

We generally expense sales commissions when incurred because the amortization period is less than one year. We record these costs within selling, general and administrative expenses.