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Note 9 - Product Warranty Obligations
 6 Months Ended
Jun. 30, 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 June 30,

  

Six Months Ended June 30,

 
  

2023

  

2022

  

2023

  

2022

 

Balance at beginning of period

 $128,599  $101,491  $138,011  $94,213 

Payments

  (25,490)  (18,434)  (51,642)  (31,458)

Provision for warranty issued

  17,352   21,668   33,217   43,093 

Changes in estimates for pre-existing warranties

  1,761   5,613   2,636   4,490 

Balance at end of period

 $122,222  $110,338  $122,222  $110,338 

 

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,

 
  

2023

  

2022

  

2023

  

2022

 

Balance at beginning of period

 $136,685  $115,923  $132,813  $111,647 

Deferred revenue contracts issued

  10,433   11,332   20,159   20,878 

Amortization of deferred revenue contracts

  (6,196)  (5,357)  (12,050)  (10,627)

Balance at end of period

 $140,922  $121,898  $140,922  $121,898 

 

The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of  June 30, 2023 is as follows:

 

Remainder of 2023

 $12,789 

2024

  26,454 

2025

  26,744 

2026

  22,638 

2027

  17,656 

After 2027

  34,641 

Total

 $140,922 

 

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

 

  

June 30,

  

December 31,

 
  

2023

  

2022

 

Product warranty liability

        

Current portion - Accrued product warranty

 $74,025  $89,141 

Long-term portion - other long-term liabilities

  48,197   48,870 

Total

 $122,222  $138,011 
         

Deferred revenue related to extended warranties

        

Current portion - other accrued liabilities

 $25,818  $30,291 

Long-term portion - other long-term liabilities

  115,104   102,522 

Total

 $140,922  $132,813