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Note 9 - Product Warranty Obligations | 9 Months Ended
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Sep. 30, 2022
Notes to Financial Statements |
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 September 30, |  |  | Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Balance at beginning of period |  | $ | 110,338 |  |  | $ | 74,758 |  |  | $ | 94,213 |  |  | $ | 59,218 |
Product warranty reserve assumed in acquisition |  |  | - |  |  |  | 1,085 |  |  |  | - |  |  |  | 1,085 |
Payments |  |  | (22,677 | ) |  |  | (10,475 | ) |  |  | (54,135 | ) |  |  | (29,536 | )
Provision for warranty issued |  |  | 19,076 |  |  |  | 16,527 |  |  |  | 62,169 |  |  |  | 48,521 |
Changes in estimates for pre-existing warranties (1) |  |  | 38,571 |  |  |  | 1,089 |  |  |  | 43,061 |  |  |  | 3,696 |
Balance at end of period |  | $ | 145,308 |  |  | $ | 82,984 |  |  | $ | 145,308 |  |  | $ | 82,984 |
| (1) | Includes a specific warranty provision recorded during the third quarter of 2022 in the amount of $37,338 to address certain clean energy product warranty-related matters.
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, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Balance at beginning of period |  | $ | 121,898 |  |  | $ | 100,484 |  |  | $ | 111,647 |  |  | $ | 89,788 |
Deferred revenue contracts issued |  |  | 10,324 |  |  |  | 11,105 |  |  |  | 31,202 |  |  |  | 31,304 |
Amortization of deferred revenue contracts |  |  | (5,470 | ) |  |  | (5,014 | ) |  |  | (16,097 | ) |  |  | (14,517 | )
Balance at end of period |  | $ | 126,752 |  |  | $ | 106,575 |  |  | $ | 126,752 |  |  | $ | 106,575 |
The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of September 30, 2022 is as follows:
Remainder of 2022 |  | $ | 5,657 |
2023 |  |  | 24,119 |
2024 |  |  | 24,276 |
2025 |  |  | 21,395 |
2026 |  |  | 17,028 |
After 2026 |  |  | 34,277 |
Total |  | $ | 126,752 |
Standard product warranty obligations and extended warranty related deferred revenues are included in the condensed consolidated balance sheets as follows:
|  | September 30, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
Product warranty liability |  |  |  |  |  |  |  |
Current portion - accrued product warranty |  | $ | 100,451 |  |  | $ | 59,052 |
Long-term portion - other long-term liabilities |  |  | 44,857 |  |  |  | 35,161 |
Total |  | $ | 145,308 |  |  | $ | 94,213 |
Deferred revenue related to extended warranties |  |  |  |  |  |  |  |
Current portion - other accrued liabilities |  | $ | 23,237 |  |  | $ | 20,556 |
Long-term portion - other long-term liabilities |  |  | 103,515 |  |  |  | 91,091 |
Total |  | $ | 126,752 |  |  | $ | 111,647 |

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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 https://asc.fasb.org/topic&trid=2155896 + Details
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