Note 7: Product Warranties

We accrue an estimated liability for product warranties at the time the revenue is recognized. We estimate future warranty claims based on claims experience and any additional anticipated future costs on previously sold products. Our liability estimates incorporate the cost of repairs including materials consumed, labor and overhead amounts necessary to perform the repair and any costs associated with delivery of the repaired product to the customer. Approximately 95% of our warranty liability relates to our Upholstery segment as we generally warrant our products against defects for one year on fabric and leather, from one to ten years on cushions and padding, and up to a lifetime on certain mechanisms and frames. Labor costs relating to our parts are warrantied for one year. The warranty period begins when the product is received by the consumer. Considerable judgment is used in making our estimates. Differences between actual and estimated costs are recorded when the differences are known.

A reconciliation of the changes in our product warranty liability for the three months ended July 26, 2014, and July 27, 2013, is as follows:

	Quarter Ended
(Unaudited, amounts in thousands)	7/26/14			7/27/13
Balance as of the beginning of the period	$	16,013		$	15,525
Accruals during the period	4,317			3,789
Accrual adjustments	(953		)	—
Settlements during the period	(4,121		)	(3,493		)
Balance as of the end of the period	$	15,256		$	15,821

As of July 26, 2014, and April 26, 2014, $9.4 million and $9.8 million, respectively, of our product warranty liability was included in accrued expenses and other current liabilities in our consolidated balance sheet, with the remainder included in other long-term liabilities. The accruals recorded during the periods presented primarily reflected charges related to warranties issued during the respective periods. Accrual adjustments reflected a change in the prior estimates of our product warranty liability.