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Note 9 - Product Warranty Obligations
 3 Months Ended
Mar. 31, 2023
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 March 31,

  
   

2023

    

2022

  

Balance at beginning of period

   $ 138,011     $ 94,213  

Payments

     (26,152 )     (13,024 )

Provision for warranty issued

     15,865       21,425  

Changes in estimates for pre-existing warranties

     875       (1,123 )

Balance at end of period

   $ 128,599     $ 101,491  

 

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,

  
   

2023

    

2022

  

Balance at beginning of period

   $ 132,813     $ 111,647  

Deferred revenue contracts issued

     9,726       9,546  

Amortization of deferred revenue contracts

     (5,854 )     (5,270 )

Balance at end of period

   $ 136,685     $ 115,923  

 

The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of  March 31, 2023 is as follows:

 

Remainder of 2023

 $18,638 

2024

  25,688 

2025

  25,085 

2026

  20,734 

2027

  15,881 

After 2027

  30,659 

Total

 $136,685 

 

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

 

   

March 31,

    

December 31,

  
   

2023

    

2022

  

Product warranty liability

                

Current portion - accrued product warranty

   $ 80,902     $ 89,141  

Long-term portion - other long-term liabilities

     47,697       48,870  

Total

   $ 128,599     $ 138,011  
                 

Deferred revenue related to extended warranties

                

Current portion - other accrued liabilities

   $ 30,890     $ 30,291  

Long-term portion - other long-term liabilities

     105,795       102,522  

Total

   $ 136,685     $ 132,813