XML 34 R17.htm IDEA: XBRL DOCUMENT v3.24.0.1
Note 11 - Product Warranty Obligations
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Product Warranty Disclosure [Text Block]

11.

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 related product to a customer based on 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:

 

  

Year Ended December 31,

 
  

2023

  

2022

  

2021

 

Balance at beginning of period

 $138,011  $94,213  $59,218 

Product warranty reserve assumed in acquisition

  -   -   3,932 

Payments

  (92,200)  (77,476)  (42,682)

Provision for warranty issued

  67,104   80,340   69,280 

Changes in estimates for pre-existing warranties (1)

  3,493   40,934   4,465 

Balance at end of period

 $116,408  $138,011  $94,213 

 

(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 related matters. 

 

The Company also 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. The Company believes the straight-line method is appropriate because the performance obligation is satisfied based on the passage of time. The amortization of deferred revenue is recorded to net sales in the consolidated statements of comprehensive income. The following is a tabular reconciliation of the deferred revenue related to extended warranty coverage:

 

  

Year Ended December 31,

 
  

2023

  

2022

  

2021

 

Balance at beginning of period

 $132,813  $111,647  $89,788 

Deferred revenue contracts issued

  48,107   42,869   41,560 

Amortization of deferred revenue contracts

  (25,050)  (21,703)  (19,701)

Balance at end of period

 $155,870  $132,813  $111,647 

 

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

 

2024

 $28,203 

2025

  30,088 

2026

  27,407 

2027

  22,069 

After 2027

  48,103 

Total

 $155,870 

 

The Company has a post-sale extended warranty marketing agreement with a third party, pursuant to which the Company is required to pay fees to the third-party service provider based on the number of extended warranty contracts that they sell, which it classifies as costs to obtain a contract. These fees are deferred and recorded as other assets in the consolidated balance sheets, and then amortized to net sales in the consolidated statements of comprehensive income over the same period that the underlying deferred revenue is recognized. Deferred contract costs as of December 31, 2023 and 2022 were $10,153 and $9,199, respectively. Amortization of deferred contract costs recorded during the years ended December 31, 2023, 2022 and 2021 was $2,306, $1,932, and $1,739, respectively.

 

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

 

  

December 31,

 
  

2023

  

2022

 

Product warranty liability

        

Current portion - Accrued product warranty

 $65,298  $89,141 

Long-term portion - other long-term liabilities

  51,110   48,870 

Total

 $116,408  $138,011 
         

Deferred revenue related to extended warranties

        

Current portion - other accrued liabilities

 $28,203  $30,291 

Long-term portion - Deferred revenue

  127,667   102,522 

Total

 $155,870  $132,813