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WARRANTY OBLIGATIONS AND OTHER GUARANTEES | 12 Months Ended
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Dec. 31, 2011
WARRANTY OBLIGATIONS AND OTHER GUARANTEES |
WARRANTY OBLIGATIONS AND OTHER GUARANTEES |
NOTE 10—WARRANTY OBLIGATIONS AND OTHER GUARANTEES The Company provides a standard warranty on its equipment and terminal sales for a period generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years. The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as a reduction of cost of net sales. From time to time, the Company may be subject to additional costs related to non-standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. Warranty expirations recorded as a reduction of cost of net sales approximated $1.4 million and $3.5 million for the years ended December 31, 2011 and 2010, respectively, and are included in the table below as benefit from expirations, net. The following table summarizes the activity related to warranty obligations during the years ended December 31, 2011, 2010 and 2009. The Company's warranty obligations, included in other current liabilities and related activity for the years ended December 31, 2011, 2010 and 2009 are as follows (in thousands):
Balance at December 31, 2008 |  | $ | 29,840 |
Accruals for warranties issued during the period, net of expirations |  |  | 6,706 |
Settlements made during the period |  |  | (20,396 | )
Balance at December 31, 2009 |  |  | 16,150 |
Accruals for warranties issued during the period (benefit from expirations), net |  |  | (3,103 | )
Settlements made during the period |  |  | (5,313 | )
Balance at December 31, 2010 |  |  | 7,734 |
Accruals for warranties issued during the period (benefit from expirations), net |  |  | (191 | )
Settlements made during the period |  |  | (2,883 | )
Balance at December 31, 2011 |  | $ | 4,660 |
Certain of the Company's sales contracts include provisions under which customers would be indemnified by the Company in the event of, among other things, a third-party claim against the customer for intellectual property rights infringement related to the Company's products. There are no limitations on the maximum potential future payments under these guarantees. Historically, the Company has not incurred material costs as a result of obligations under these agreements. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

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- Definition The entire disclosure for standard and extended product warranties and other product guarantee contracts, including a tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 45 -Paragraph 14 -Subparagraph a, b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249 + Details
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