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Note 10 - Product Warranty Obligations | 6 Months Ended
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Jun. 30, 2018
Notes to Financial Statements |
Product Warranty Disclosure [Text Block] | 10 . Product Warranty Obligations The Company records a liability for product warranty obligations accounted for as assurance warranties at the time of sale to a customer based upon historical warranty experience. The Company also records a liability for specific warranty matters when they become known and are reasonably estimable. The following is a tabular reconciliation of the Company’s product warranty liability:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Balance at beginning of period |  | $ | 36,319 |  |  | $ | 32,008 |  |  | $ | 35,422 |  |  | $ | 31,695 |
Product warranty reserve assumed in acquisition |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 43 |
Payments |  |  | (4,907 | ) |  |  | (4,285 | ) |  |  | (9,892 | ) |  |  | (8,845 | )
Provision for warranty issued |  |  | 6,275 |  |  |  | 4,086 |  |  |  | 11,478 |  |  |  | 8,246 |
Changes in estimates for pre-existing warranties |  |  | 973 |  |  |  | 1,004 |  |  |  | 1,652 |  |  |  | 1,674 |
Balance at end of period |  | $ | 38,660 |  |  | $ | 32,813 |  |  | $ | 38,660 |  |  | $ | 32,813 |
Additionally, the Company sells extended warranty coverage for certain products, which it accounts for as a service warranty. The sales of extended warranties are recorded as deferred revenue, and typically have a duration of five to ten years. The deferred revenue related to extended warranty coverage is amortized over the duration of the extended warranty contract period, following the standard warranty period, using the straight-line method. The Company believes the straight-line method is appropriate because the performance obligation is satisfied based on the passage of time. The amortization of deferred revenue is recorded to selling and service expenses on the condensed consolidated statements of comprehensive income as an offset to warranty expense. The following is a tabular reconciliation of the deferred revenue related to extended warranty coverage:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Balance at beginning of period |  | $ | 60,113 |  |  | $ | 37,562 |  |  | $ | 57,854 |  |  | $ | 36,139 |
Deferred revenue contracts issued |  |  | 5,526 |  |  |  | 7,442 |  |  |  | 10,242 |  |  |  | 10,463 |
Amortization of deferred revenue contracts |  |  | (2,632 | ) |  |  | (1,648 | ) |  |  | (5,089 | ) |  |  | (3,246 | )
Balance at end of period |  | $ | 63,007 |  |  | $ | 43,356 |  |  | $ | 63,007 |  |  | $ | 43,356 |
The timing of recognition of the Company’s deferred revenue balance related to extended warranties at June 30, 2018 is as follows:
Remainder of 2018 |  | $ | 6,125 |
2019 |  |  | 12,682 |
2020 |  |  | 11,750 |
2021 |  |  | 9,849 |
2022 |  |  | 7,711 |
After 2022 |  |  | 14,890 |
Total |  | $ | 63,007 |
In the second quarter of 2017, the Company launched a post-sale extended warranty marketing program. In the program’s agreement, the Company is required to pay fees to a third -party service provider based on the number of extended warranty contracts sold, which it classifies as costs to obtain a contract. The contract costs are deferred and recorded as other assets in the condensed consolidated balance sheets. The deferred contract costs are amortized to selling and service expense in the condensed consolidated statements of comprehensive income consistent with how the related deferred revenue is recognized. The balance of deferred contract costs as of June 30, 2018 and 2017 was $4,183 and $798, respectively. Amortization of deferred contract costs recorded during the six months ended June 30, 2018 was $277. Product warranty obligations and extended warranty related deferred revenues are included in the condensed consolidated balance sheets as follows:
|  | June 30, |  |  | December 31, |
|  | 2018 |  |  | 2017 |
Product warranty liability |  |  |  |  |  |  |  |
Current portion - other accrued liabilities |  | $ | 22,080 |  |  | $ | 20,576 |
Long-term portion - other long-term liabilities |  |  | 16,580 |  |  |  | 14,846 |
Total |  | $ | 38,660 |  |  | $ | 35,422 |
Deferred revenue related to extended warranties |  |  |  |  |  |  |  |
Current portion - other accrued liabilities |  | $ | 12,447 |  |  | $ | 11,017 |
Long-term portion - other long-term liabilities |  |  | 50,560 |  |  |  | 46,837 |
Total |  | $ | 63,007 |  |  | $ | 57,854 |

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- Definition The entire disclosure for standard and extended product warranties and other product guarantee contracts, including a tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -URI http://asc.fasb.org/topic&trid=2155896 + Details
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