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Note 10 - Product Warranty Obligations

9 Months Ended

Sep. 30, 2020

Product Warranty Disclosure [Text Block]

10. Product Warranty Obligations

The Company records a liability for standard product warranty obligations accounted for as assurance warranties at the time of sale of the product 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 standard product warranty liability accounted for as an assurance warranty:

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2020*			*2019*			*2020*			*2019*
Balance at beginning of period	$	50,324		$	45,324		$	49,316		$	41,785
Product warranty reserve assumed in acquisition		124			-			124			407
Payments		(8,667	)		(7,576	)		(24,136	)		(18,867	)
Provision for warranty issued		10,949			8,518			27,691			23,656
Changes in estimates for pre-existing warranties		(575	)		230			(840	)		(485	)
Balance at end of period	$	52,155		$	46,496		$	52,155		$	46,496

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. Revenue is recognized on extended warranty contracts when the revenue recognition criteria are met, resulting in ratable recognition over the contract term. The amortization of deferred revenue is recorded to net sales in the condensed consolidated statements of comprehensive income. The following is a tabular reconciliation of the deferred revenue related to extended warranty coverage:

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2020*			*2019*			*2020*			*2019*
Balance at beginning of period	$	83,153		$	74,517		$	78,738		$	68,340
Deferred revenue contracts issued		6,802			5,918			18,966			18,832
Amortization of deferred revenue contracts		(4,241	)		(3,573	)		(11,990	)		(10,310	)
Balance at end of period	$	85,714		$	76,862		$	85,714		$	76,862

The timing of recognition of the Company’s deferred revenue balance related to extended warranties at September 30, 2020 is as follows:

Remainder of 2020	$	4,382
2021		19,630
2022		18,567
2023		14,058
2024		9,801
After 2024		19,276
Total	$	85,714

Standard product warranty obligations and extended warranty related deferred revenues are included in the condensed consolidated balance sheets as follows:

	*September 30,*		*December 31,*
	*2020*		*2019*
Product warranty liability
Current portion - other accrued liabilities	$	29,962	$	27,885
Long-term portion - other long-term liabilities		22,193		21,431
Total	$	52,155	$	49,316

Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	21,846	$	15,519
Long-term portion - other long-term liabilities		63,868		63,219
Total	$	85,714	$	78,738