Medical market revenue recognition- Customer orders from the medical market consist of a specified number of assembled and customized parts that the customer further integrates into their production process to produce market ready products. Customer orders do not include additional follow-on goods or services. Each order is for a series of distinct units that comprise a single performance obligation.

With the exception of prompt payment discounts, the transaction price for medical market products is the invoiced amount. Variable consideration in the form of refunds, credits, rebates, price concessions, pricing incentives or other items impacting transaction price are not present.

All of the Company’s products manufactured for the medical market are designed to each customer’s specifications, do not have an alternative use and cannot be sold or redirected by the Company to others. The Company considers contractual arrangements, laws and legal precedent in determining whether an enforceable right is present. The Company has an enforceable right to payment for any finished or in-process units, including a reasonable margin, if the customer terminates the contract for reasons other than the Company’s failure to perform as promised within our medical diabetes market and a select customer within our other medical market. For contractual arrangements in which an enforceable right exists, control of these units is deemed to transfer to the customer over time during the manufacturing process, using the same measure of progress toward satisfying the promise to deliver the units to the customer. Consequently, the transaction price is recognized as revenue over time for contractual arrangements with an enforceable right, based on actual costs incurred in the manufacturing process to date relative to total expected costs to produce all ordered units. The transaction price for contractual arrangements without an enforceable right to payment for any finished or in-process units including a reasonable margin is recognized as revenue at a point in time.

The following tables set forth, for the periods indicated, timing of revenue recognition by market:


Timing of revenue recognition for the three months ended September 30, 2020:

		Products and services transferred at point in time		Products and services transferred over time		Total
Medical:
Diabetes	$	-	$	14,518	$	14,518
Other Medical		4,973		1,158		6,131
Hearing Health:
Value Based DTEC		953		-		953
Value Based ITEC		1,779		-		1,779
Legacy OEM		2,759		-		2,759
Professional Audio Communications:		1,227		-		1,227
Total Revenue, net	$	11,691	$	15,676	$	27,367

Timing of revenue recognition for the nine months ended September 30, 2020:

		Products and services transferred at point in time		Products and services transferred over time		Total
Medical:
Diabetes	$	-	$	41,569	$	41,569
Other Medical		9,154		4,402		13,556
Hearing Health:
Value Based DTEC		3,513		-		3,513
Value Based ITEC		3,888		-		3,888
Legacy OEM		6,444		-		6,444
Professional Audio Communications:		3,502		-		3,502
Total Revenue, net	$	26,501	$	45,971	$	72,472

Timing of revenue recognition for the three months ended September 30, 2019:

		Products and services transferred at point in time		Products and services transferred over time		Total
Medical:
Diabetes	$	-	$	15,723	$	15,723
Other Medical		-		3,376		3,376
Hearing Health:
Value Based DTEC		1,510		-		1,510
Value Based ITEC		2,443		-		2,443
Legacy OEM		2,405		-		2,405
Professional Audio Communications:		1,436		-		1,436
Total Revenue, net	$	7,794	$	19,099	$	26,893

Timing of revenue recognition for the nine months ended September 30, 2019:

		Products and services transferred at point in time		Products and services transferred over time		Total
Medical:
Diabetes	$	-	$	50,837	$	50,837
Other Medical		-		9,947		9,947
Hearing Health:
Value Based DTEC		4,876		-		4,876
Value Based ITEC		7,419		-		7,419
Legacy OEM		7,749		-		7,749
Professional Audio Communications:		4,972		-		4,972
Total Revenue, net	$	25,016	$	60,784	$	85,800

During the quarter ended March 31, 2020, we recorded a cumulative adjustment of $1.2 million to reduce revenue within our other medical market to correct an error related to prior periods as a result of our determination that a portion of our sales being recognized over time needed to be recognized at a point in time. The adjustment included a reduction of the related cost of goods sold of $0.8 million and related impacts to reduce the contract asset and an increase to inventory. The adjustment was not material to our Consolidated Financial Statements for any quarterly or annual period.