Revenues, net

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenues, net

Revenues, net

Refer to Note 3 - Segment and Geographical Information to the unaudited consolidated financial statements for revenues disaggregated by reportable segments and geography.

Contract balances

The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:

	As of
	June 30, 2020		December 31, 2019
Accounts receivable, net	$	157,505	$	171,864
Contract assets	$	5,074	$	5,391
Contract liabilities
Deferred revenue (consideration received in advance)	$	14,739	$	11,259
Consideration received for process transition activities	$	2,579	$	3,036

Accounts receivable includes $71,489 and $73,920 as of June 30, 2020 and December 31, 2019, respectively, representing unbilled receivables. The Company has accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers and considers no significant performance risk associated with its unbilled receivables.

Contract assets represent upfront payments such as deal signing discounts or deal signing bonuses made to customers. These costs are amortized over the expected period of the benefit and are recorded as an adjustment to transaction price and reduced from revenues. The Company’s assessment did not indicate any impairment losses on its contract assets for the periods presented.

Contract liabilities represent that portion of deferred revenue for which payments have been received in advance from customers. This may also include revenues deferred for certain contracts where services have been rendered but other conditions for revenue recognition have not been met for example, where a legally enforceable contract is not executed. The Company also defers revenues attributable to certain process transition activities for which costs have been capitalized by the Company as contract fulfillment costs. Consideration received from customers, if any, relating to such transition activities are classified under contract liabilities and are included within “Deferred revenues” and “other non-current liabilities” in the unaudited consolidated balance sheets. The revenues are recognized as (or when) the performance obligation is fulfilled under the contract with customer.

Revenue recognized during the three and six months ended June 30, 2020 and 2019, which was included in the contract liabilities balance at the beginning of the respective periods:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Revenue recognized	$	2,226	$	1,450	$	8,194	$	4,226

Contract acquisition and fulfillment costs

	Contract Acquisition Costs
	Three months ended				Six months ended				Year ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		December 31, 2019
									(Audited)
Opening Balance	$	1,215	$	513	$	1,307	$	713	$	713
Addition	187		—		187		—		1,222
Amortization	(132)		(44)		(224)		(244)		(628)
Closing Balance	$	1,270	$	469	$	1,270	$	469	$	1,307

	Contract Fulfillment Costs
	Three months ended				Six months ended				Year ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		December 31, 2019
									(Audited)
Opening Balance	$	6,916	$	4,472	$	7,255	$	4,051	$	4,051
Addition	363		1,441		647		2,167		4,652
Amortization	(499)		(305)		(1,122)		(610)		(1,448)
Closing Balance	$	6,780	$	5,608	$	6,780	$	5,608	$	7,255

There was no impairment for contract acquisition and contract fulfillment costs as of June 30, 2020 and December 31, 2019. The capitalized costs are amortized on a straight line basis over the life of the contract.

Allowance for expected credit losses

On January 1, 2020, the Company adopted ASC Topic 326, Financial Instruments-Credit Losses. Accounts receivable and contract assets are in the scope for which assessment is made. The Company evaluates the credit risk of its customers based on a combination of various financial and qualitative factors that may affect the ability of each customer to pay. The Company considered current and anticipated future economic conditions relating to the industries of the Company’s customers and the countries where it operates. In calculating expected credit loss, the Company also considered past payment trends, credit rating and other related credit information for its significant customers to estimate the probability of default in the future and estimates relating to the possible effects resulting from COVID-19.

The duration and severity of COVID-19 and continued market volatility is highly uncertain and, as such, the impact on expected losses is subject to significant judgment, including but not limited to changes in customers’ credit rating, and may cause variability in the Company’s allowance for credit losses in future periods.

As of January 1, 2020 the Company’s provision for doubtful receivables was $1,163, which was based on previous U.S. GAAP standards. There was no material impact on provision when calculated by applying the Topic 326 guidance.

	As of
	June 30, 2020		January 1, 2020
Accounts receivable, including unbilled receivables	$	158,939	$	173,027
Less: Allowance for lifetime expected credit loss	(1,434)		(1,163)
Accounts receivable, net	$	157,505	$	171,864

The movement in allowance for current expected credit loss on customer balances for the three and six months ended June 30, 2020 and 2019 and year ended December 31, 2019 was as follows:

	Three months ended				Six months ended				Year ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019		December 31, 2019
Balance at the beginning of the period	$	1,346	$	1,255	$	1,163	$	956	$	956
Additions during the period, net	186		(33)		381		265		354
Charged against allowance	(100)		(53)		(100)		(54)		(156)
Translation adjustment, if any	2		(1)		(10)		1		9
Balance at the end of the period	$	1,434	$	1,168	$	1,434	$	1,168	$	1,163