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Revenue from Lessor Arrangements and Contracts with Customers
 9 Months Ended
Sep. 30, 2019
Revenues [Abstract]  
Revenue from Lessor Arrangements and Contracts with Customers Revenue from Lessor Arrangements and Contracts with Customers
Short-Term Arrangements
The majority of the Company’s revenue is generated from short-term arrangements associated with the production and sale of concrete admixtures and cement additives within its SCC operating segment, as well as sheet and liquid membrane systems and other specialty products designed to protect the building envelope within its SBM operating segment. For further information on revenue recognition related to product sale arrangements, please refer to Note 2, "Revenue from Contracts with Customers", to the Company’s Consolidated Financial Statements included in the 2018 Annual Report on Form 10-K.
The Company generates revenue from short-term arrangements within its SCC operating segment which involve selling concrete admixtures and providing dispensers to customers. GCP has determined at contract inception that the dispensers represent a lease since the customer has the right to control the use of the dispensers over a period of time in exchange for consideration. The Company has elected to apply the practical expedient to the dispenser asset class and combine lease and non-lease components related to dispenser maintenance services. Such components will be accounted for as one component since they have the same timing and pattern of transfer and the lease component is classified as an operating lease. The combined component is accounted for in accordance with Topic 842 since the lease component is predominant. Concrete admixtures sold as a part of these arrangements represent a separate non-lease component which does not get combined with the lease component since it does not meet the defined criteria. The Company allocates contract consideration between the lease component and concrete admixtures based on their relative stand-alone selling prices determined based on a cost plus a reasonable margin approach for the lease component and standalone selling prices for the concrete admixtures. The Company recognizes revenue for the concrete admixtures at a point of time when the control is transferred to the customer. The lease component is considered to have a short non-cancelable lease term which is generally thirty days or less and classified as an operating lease. The Company recognizes revenue for the lease component on a straight line basis over the lease term. GCP records dispensers as fixed assets and depreciates them over their estimated useful life of 10 years.
Long-Term Arrangements
The Company generates revenue from long-term arrangements within its SCC operating segment, which generally consist of VERIFI® and Ductilcrete sales arrangements.
VERIFI® sales arrangements involve installing equipment on the customers’ trucks and at their plants, as well as performing slump management and truck location tracking services. The Company has determined at contract inception that the installed equipment represents a lease since the customer has the right to control the equipment use over a period of time in exchange for consideration. Slump management and truck location tracking services represent a non-lease component. The Company classifies these leases as operating and accounts for the lease and the non-lease components separately since it did not elect to apply the practical expedient to combine lease and non-lease components for the VERIFI® equipment asset class. Contract consideration for VERIFI® sales arrangements consists primarily of fixed installation fees and other fixed payments and gets allocated between the lease and non-lease components based on valuation techniques that estimate a relative stand-alone selling price of each component. The Company recognizes revenue for the lease component on a straight line basis over the lease term. VERIFI® equipment is recorded within "Properties and equipment, net" in the accompanying unaudited Consolidated Balance Sheets and depreciated over an estimated useful life of 7 years. The services included within the non-lease component represent the Company’s stand-ready promise to perform a series of daily distinct services, which is combined into a single performance obligation. The Company recognizes revenue associated with such services over time since the customer simultaneously receives and consumes the benefits provided by such services. The transaction price in a VERIFI® sales arrangement consists of fixed installation fees and other fixed payments included in the contract consideration, as well as slump management fees which are dependent on the quantity of material poured and represent variable consideration. The Company excludes variable consideration from the contract consideration at lease commencement and allocates it between the lease and non-lease components based on their relative stand-alone selling prices. Revenue related to variable consideration for the lease and non-lease components is recorded at the time of the transfer of services to its customers, which is constrained by the amount for which a significant revenue reversal is not probable to occur. Revenue generated from VERIFI® sales arrangements represented less than 10% of the Company's consolidated revenue during the three and nine months ended September 30, 2019 and 2018.
Revenue generated from Ductilcrete sales arrangements also represented less than 10% of the Company's consolidated revenue during the three and nine months ended September 30, 2019 and 2018. For further information on revenue recognition related to these arrangements, please refer to Note 2, "Revenue from Contracts with Customers", to the Company’s Consolidated Financial Statements included in the 2018 Annual Report on Form 10-K.
The Company’s revenue is principally recognized as goods and services are delivered and performance obligations are satisfied upon delivery. The Company has certain long-term arrangements resulting in remaining obligations for which the work has not been performed or has been partially performed. As of September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $6.7 million, including the estimated transaction price to be earned as revenue over the remaining term of these contracts, which is generally one to five years.
Lease elements within sales arrangements
Certain sales arrangements within the SCC operating segment related to certain admixture contracts and VERIFI® include lease components, as discussed above.
The following table summarizes the revenue recognized for these sales arrangements for the three and nine months ended September 30, 2019 and 2018 and distinguishes between the lease and non-lease components:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(In millions)
2019
 
2018
 
2019
 
2018
Lease revenue(1):
 
 
 
 
 
 
 
Lease payments revenue
$
6.5

 
$
6.9

 
$
19.7

 
$
20.0

Variable lease revenue
2.1

 
1.7

 
5.6

 
5.0

Total lease revenue
$
8.6

 
$
8.6

 
$
25.3

 
$
25.0

 
 
 
 
 
 
 
 
Service revenue(2):
 
 
 
 
 
 
 
Fixed fee revenue
$
—

 
$
—

 
$
0.1

 
$
0.1

Variable fee revenue
1.4

 
1.1

 
3.4

 
3.1

Total service revenue
$
1.4

 
$
1.1

 
$
3.5

 
$
3.2

Total revenue
$
10.0

 
$
9.7

 
$
28.8

 
$
28.2

________________________________
(1) 
Lease revenue consists of dispensers lease revenue, as well as an allocated portion of VERIFI® fixed fees and variable slump management fees. Lease revenue is included within "Net Sales" in the accompanying unaudited Consolidated Statements of Operations.
(2) 
Service revenue consists of an allocated portion of VERIFI® fixed fees and variable slump management fees. Service revenue is included within "Net Sales" in the accompanying unaudited Consolidated Statements of Operations.
As of September 30, 2019 and December 31, 2018, the Company’s total trade accounts receivable balance was $187.0 million and $198.6 million, respectively, of which $4.6 million and $4.7 million, respectively, was related to trade accounts receivable associated with lease revenue generated from certain SCC contracts.
The future minimum lease payments receivable under the operating leases were not material as of September 30, 2019.
Other revenue considerations
Contract assets consist of unbilled amounts typically resulting from sales under long-term contracts when the revenue recognized exceeds the amount billed to the customer. Contract liabilities consist of advance customer payments and billings for revenue not meeting the criteria to be recognized and/or in excess of costs incurred. The Company’s contract assets and liabilities resulting from its contracts in the SCC or SBM operating segments were not material as of September 30, 2019 and December 31, 2018. Additionally, the amounts recorded in the accompanying unaudited Consolidated Statements of Operations during the three and nine months ended September 30, 2019 and 2018 related to changes in the contract assets and liabilities were not material.