Deferred Warranty Revenue and Warranty Reserve

12 Months Ended

Dec. 31, 2016

Deferred Warranty Revenue and Warranty Reserve

Note 8 – Deferred Warranty Revenue and Warranty Reserve

Our standard practice is to provide a warranty on our DIGIPASS hardware for one to two years after the date of purchase. Customers may purchase extended warranties covering periods from one to four years after the standard warranty period. We defer the revenue associated with the extended warranty and recognize it into income on a straight-line basis over the extended warranty period. The estimated cost of providing warranty services during the extended warranty period is less than the revenue related to such warranty service.

Deferred warranty revenue at December 31, 2016 will be recognized as revenue as follows:


Year	Amount
2017	$	22
2018		12
2019		3

Total	$	37

We maintain a reserve for the potential cost of future warranty claims related to products sold and recognized in revenue. The reserve is included in accrued expenses. Activity in the warranty reserve account during the three years ended December 31, 2016 was as follows:


	For the years ended December 31,
	2016			2015			2014
Balance, beginning of period	$	43		$	85		$	116
Provision for warranty claims		165			165			173
Product or cash issued to settle claims		(55	)		(207	)		(204	)

Balance, end of period	$	153		$	43		$	85