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Note 9 - Product Warranty Obligations

3 Months Ended

Mar. 31, 2021

Product Warranty Disclosure [Text Block]

9. 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 March 31,*
	*2021*			*2020*
Balance at beginning of period	$	59,218		$	49,316
Payments		(9,779	)		(7,588	)
Provision for warranty issued		14,830			8,286
Changes in estimates for pre-existing warranties		1,028			(991	)
Balance at end of period	$	65,297		$	49,023

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 March 31,*
	*2021*			*2020*
Balance at beginning of period	$	89,788		$	78,738
Deferred revenue contracts issued		8,031			5,939
Amortization of deferred revenue contracts		(4,637	)		(3,797	)
Balance at end of period	$	93,182		$	80,880

The timing of recognition of the Company’s deferred revenue balance related to extended warranties at March 31, 2021 is as follows:

Remainder of 2021	$	13,707
2022		19,781
2023		18,092
2024		13,373
2025		9,570
After 2025		18,659
Total	$	93,182

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

	*March 31,*		*December 31,*
	*2021*		*2020*
Product warranty liability
Current portion - other accrued liabilities	$	40,632	$	37,417
Long-term portion - other long-term liabilities		24,665		21,801
Total	$	65,297	$	59,218

Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	22,251	$	18,857
Long-term portion - other long-term liabilities		70,931		70,931
Total	$	93,182	$	89,788