9. ACCRUED AND OTHER LIABILITIES—NONCURRENT

Accrued liabilities consisted of the following:

	September 30,
	2016		2015

Payroll and related	$	382,845	$	330,916
Deferred revenue		637,763		51,345
Warranty reserve		285,402		289,660
Accrued contract costs		197,034		197,034
Other		-		1,600
Total	$	1,503,044	$	870,555

Other liabilities - noncurrent consisted of the following:

Deferred rent	$	93,456	$	121,996
Extended warranty		71,582		25,958
Total	$	165,038	$	147,954

Payroll and related

Accrued payroll and related consists primarily of accrued vacation, as well as accrued sales commissions and benefits at September 30, 2016 and 2015.

Deferred Revenue

Deferred revenue at September 30, 2016 included prepayments from customers on current orders scheduled for delivery in the year ended September 30, 2017.

Warranty Reserve

Details of the estimated warranty reserve were as follows:

	Years ended September 30,
	2016			2015
Beginning balance	$	315,618		$	314,311
Warranty provision		79,954			42,645
Warranty settlements		(38,588	)		(41,338	)
Ending balance	$	356,984		$	315,618

	September 30,
	2016		2015
Short-term warranty reserve	$	285,402	$	289,660
Long-term warranty reserve		71,582		25,958
Total warranty reserve	$	356,984	$	315,618

The Company establishes a warranty reserve based on anticipated warranty claims at the time product revenue is recognized. Factors affecting warranty reserve levels include the number of units sold, anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period.

Accrued contract costs

Accrued contract costs consist of accrued expenses for contracting a third party service provider to fulfill repair and maintenance obligations required under a contract through 2019 with a foreign military for units sold in the year ended September 30, 2011. Payments to the service provider will be made annually upon completion of each year of service. These services are being recorded in cost of revenues to correspond with the revenues for these services.