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Note 9 - Agreements and Commitments | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE 9 - AGREEMENTS, COMMITMENTS AND CONTINGENCIES Agreements -- LiqTech is planning to establish a joint venture to supply and operate water treatment systems for oil and gas producers in the Middle East. The partner in the joint venture is a local company. LiqTech expects to deliver technological know-how, design of water treatment systems and components to support potential projects in the Middle East. The joint venture will be established in the form of a jointly-owned limited liability company, incorporated under the laws in the local country, and LiqTech holds 49% of the shares. All profits of the company are to be allocated proportionally to the ownership share, and none of the parties are liable for the company’s liabilities towards third parties. Contingencies -- From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. On February 27, 2019, LiqTech was contacted by a former supplier alleging that the Company owed DKK 543,905 ($89,800) for services rendered in 2017. The claimant has previously filed a lawsuit to claim payment for the services, which was denied by the Company due to severe errors in the services rendered. The claim was settled out of court in which the Company agreed to pay DKK 400,000 ($63,575) for full and final settlement. LiqTech is as of December 31, 2021 in an arbitration regarding a commercial dispute related to the delivery of Water treatment system installed on a commercial power plant. The parties disagree on whether the supplied equipment functions correctly including the ability to meet the agreed criteria. The dispute additionally concerns the equipment’s down time and the use of additives to run the equipment. The arbitration is pending Statement of Claim and Statement of Response issued by the parties involved. LiqTech is currently disputing the claim in full and has filed a counterclaim regarding unpaid invoices. The claim against LiqTech amounts to DKK 1,671,768 ($254,796) with the addition of interest. Product Warranties - The Company provides a standard warranty on its systems, generally for a period of one to three years after customer acceptance. The Company estimates the costs that may be incurred under its standard warranty programs and records a liability for such costs at the time product revenue is recognized. In addition, the Company sells an extended warranty for certain systems, which generally provides a warranty for up to four years from the date of commissioning. The specific terms and conditions of the warranties vary depending upon the product sold and the country in which the Company does business. Revenue received for the sale of extended warranty contracts is deferred and recognized in the same manner as the costs incurred to perform under the warranty contracts. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts, as necessary. Factors that affect the warranty liability include the number of units sold, historical and anticipated rates of warranty claims and the cost per claim. Changes in the Company's current and long-term warranty obligations included in accrued expenses on the balance sheet for the fiscal years ended December 31, 2021 and 2020 were as follows:
|  | 2021 |  |  | 2020 |
Balance at January 1, |  | $ | 1,056,613 |  |  | $ | 813,288 |
Warranty costs charged to cost of goods sold |  |  | 177,302 |  |  |  | 348,241 |
Utilization charges against reserve |  |  | (191,068 | ) |  |  | (199,624 | )
Foreign currency effect |  |  | (80,534 | ) |  |  | 94,708 |
Balance at December 31, |  | $ | 962,313 |  |  | $ | 1,056,613 |

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