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Note 9 - Product Warranty Obligations

6 Months Ended

Jun. 30, 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 June 30,*						*Six Months Ended June 30,*
	*2021*			*2020*			*2021*			*2020*
Balance at beginning of period	$	65,297		$	49,023		$	59,218		$	49,316
Payments		(9,282	)		(7,881	)		(19,061	)		(15,469	)
Provision for warranty issued		17,164			8,456			31,994			16,742
Changes in estimates for pre-existing warranties		1,579			726			2,607			(265	)
Balance at end of period	$	74,758		$	50,324		$	74,758		$	50,324

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 June 30,*						*Six Months Ended June 30,*
	*2021*			*2020*			*2021*			*2020*
Balance at beginning of period	$	93,182		$	80,880		$	89,788		$	78,738
Deferred revenue contracts issued		12,168			6,225			20,199			12,164
Amortization of deferred revenue contracts		(4,866	)		(3,952	)		(9,503	)		(7,749	)
Balance at end of period	$	100,484		$	83,153		$	100,484		$	83,153

The timing of recognition of the Company’s deferred revenue balance related to extended warranties at June 30, 2021 is as follows:

Remainder of 2021	$	10,048
2022		20,430
2023		19,609
2024		15,376
2025		11,676
After 2025		23,345
Total	$	100,484

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

	*June 30,*		*December 31,*
	*2021*		*2020*
Product warranty liability
Current portion - other accrued liabilities	$	47,350	$	37,417
Long-term portion - other long-term liabilities		27,408		21,801
Total	$	74,758	$	59,218

Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	20,194	$	18,857
Long-term portion - other long-term liabilities		80,290		70,931
Total	$	100,484	$	89,788