5. Balance Sheet Components

Property and Equipment, net

The Company’s property and equipment consisted of the following:


		September 30,		December 31,
	Useful Life	2016		2015
		(in thousands)
Machinery and equipment	3-5 years	$	22,926	$	20,670
Furniture and fixtures	3 years		493		217
Computer equipment	3 years		813		789
Capitalized software held for internal use	3 years		2,172		1,159
Leasehold improvements	Lesser of useful life or lease term		3,845		1,686
Construction-in-process			12,005		1,979
			42,254		26,500
Less: Accumulated depreciation and amortization			(16,638)		(13,790)
Total Property and Equipment, net		$	25,616	$	12,710

The Company periodically evaluates the carrying value of long-lived assets when events or circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the estimated realizable value of the asset is less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined based on the estimated realizable value of the long-lived asset.

During the third quarter of 2016, the Company decreased the depreciable lives of certain sequencing and automation machinery and equipment to the end of the second quarter of 2017 based upon management’s estimated use. The effect of this change in estimate for both the three and nine months ended September 30, 2016 was an increase in loss from operations and net loss of $0.4 million. The effect of this change in estimate was an increase in net basic and diluted loss per share of $0.01 for both the three and nine months ended September 30, 2016.

Accrued Compensation

The Company’s accrued compensation consisted of the following:


	September 30,		December 31,
	2016		2015
	(in thousands)
Accrued paid time off	$	1,925	$	2,024
Accrued commissions		3,562		3,691
Accrued bonuses		2,309		1,348
Other accrued compensation		2,418		1,489
Total accrued compensation	$	10,214	$	8,552

Other Accrued Liabilities

The Company’s other accrued liabilities consisted of the following:


	September 30,		December 31,
	2016		2015
	(in thousands)
Accrued expenses	$	22,959	$	17,870
Accrued rent		33		450
Deferred lease obligation		—		42
Sales and use tax payable		355		346
Total other accrued liabilities	$	23,347	$	18,708

In April 2016, the Company entered into a four-year agreement with an insurance carrier whereby in return for partial exclusivity and the right to pricing benefits the Company agreed to pay total consideration of $3.2 million. The total consideration was paid in the third quarter of 2016. As of September 30, 2016, $2.8 million in deferred cost was included in other long-term assets. The deferred costs are being amortized ratably over the four-year term of the agreement and for the three and nine months ended September 30, 2016, the Company amortized $0.2 million and $0.4 million, respectively, which was recorded as a reduction of product revenue.