3. Revenue

Revenue Recognition

Under ASC 606, revenues are recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. In order to achieve that core principle, the Company applies the following five-step approach: 1) identify the contract with a customer, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when a performance obligation is satisfied.

The Company considers confirmed customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts, from an accounting perspective, with customers. Under our standard contracts, the only performance obligation is the delivery of manufactured goods and the performance obligation is satisfied at a point in time, when the Company transfers control of the manufactured goods. The Company may receive orders for products to be delivered over multiple dates that may extend across several reporting periods. The Company invoices for each order and recognizes revenue for each distinct product upon shipment, once transfer of control has occurred. Payment terms are standard for the industry and jurisdiction in which we operate. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment, to determine the net consideration to which the Company expects to be entitled. Discounts or rebates are specifically stated in customer contracts or invoices, and are recorded as a reduction of revenue in the period the related revenue is recognized. The product price as specified on the customer confirmed orders is considered the standalone selling price. The Company allocates the transaction price to each distinct product based on its relative standalone selling price. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which generally occurs at shipment. We review all material contracts to determine transfer of control based upon the business practices and legal requirements of each country.

The amount of shipping and handling fees invoiced to our customers at the time our product is shipped is included in net sales as we are the principle in those activities. Sales, valued-added and other taxes collected from our customers and remitted to governmental authorities are excluded from net sales.

There were no changes in amounts previously reported in the Company’s condensed consolidated financial statements due to adopting ASC 606.

Revenues disaggregated by geography and reportable segment for the three months ended June 30, 2018, follow:


	EMEA		United States		Asia Pacific		Latin America		Total
	(Dollars in thousands)
Performance Coatings	$	126,133	$	11,715	$	29,129	$	26,472	$	193,449
Performance Colors and Glass		63,675		38,504		18,063		5,785		126,027
Color Solutions		36,227		41,272		10,532		8,732		96,763
Total net sales	$	226,035	$	91,491	$	57,724	$	40,989	$	416,239

Revenues disaggregated by geography and reportable segment for the three months ended June 30, 2017, follow:


	EMEA		United States		Asia Pacific		Latin America		Total
	(Dollars in thousands)
Performance Coatings	$	88,814	$	11,604	$	23,089	$	28,239	$	151,746
Performance Colors and Glass		47,592		37,832		15,796		5,417		106,637
Color Solutions		34,961		39,179		8,775		7,334		90,249
Total net sales	$	171,367	$	88,615	$	47,660	$	40,990	$	348,632

Revenues disaggregated by geography and reportable segment for the six months ended June 30, 2018, follow:


	EMEA		United States		Asia Pacific		Latin America		Total
	(Dollars in thousands)
Performance Coatings	$	245,249	$	24,534	$	55,076	$	53,238	$	378,097
Performance Colors and Glass		125,019		75,595		34,578		11,340		246,532
Color Solutions		76,710		82,898		20,470		17,064		197,142
Total net sales	$	446,978	$	183,027	$	110,124	$	81,642	$	821,771

Revenues disaggregated by geography and reportable segment for the six months ended June 30, 2017, follow:


	EMEA		United States		Asia Pacific		Latin America		Total
	(Dollars in thousands)
Performance Coatings	$	157,973	$	22,362	$	44,406	$	53,570	$	278,311
Performance Colors and Glass		92,178		76,936		30,429		10,612		210,155
Color Solutions		70,138		77,696		17,034		15,853		180,721
Total net sales	$	320,289	$	176,994	$	91,869	$	80,035	$	669,187

Practical Expedients and Exemptions

All material contracts have an original duration of one year or less and, as such, the Company uses the practical expedient applicable to such contracts, and has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period, or when the Company expects to recognize this revenue.

When the period of time between the transfer of control of the goods and the time the customer pays for the goods is one year or less, the Company uses the practical expedient allowed by ASC 606 that provides relief from adjusting the amount of promised consideration for the effects of a financing component.

We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within Selling, general and administrative expenses.