Quarterly report pursuant to Section 13 or 15(d)

Accrued Warranty Reserve

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Accrued Warranty Reserve
9 Months Ended
Dec. 31, 2013
Accrued Warranty Reserve  
Accrued Warranty Reserve

12.  Accrued Warranty Reserve

 

The Company provides for the estimated costs of warranties at the time revenue is recognized. The specific terms and conditions of those warranties vary depending upon the product sold, the location of the sale and the length of extended warranties sold. The Company’s product warranties generally start from the delivery date and continue for up to 18 months. Factors that affect the Company’s warranty obligation include product failure rates, anticipated hours of product operations and costs of repair or replacement in correcting product failures. These factors are estimates that may change based on new information that becomes available each period. Similarly, the Company also accrues the estimated costs related to addressing reliability repairs on products covered under standard warranty and for products no longer in warranty when, in the Company’s judgment, it is prudent to provide such repairs. The Company assesses the adequacy of recorded warranty liabilities quarterly and makes adjustments to the liability as necessary. When the Company has sufficient evidence that product changes are altering the historical failure occurrence rates, the impact of such changes is taken into account in estimating future warranty liabilities.

 

Changes in accrued warranty reserve during the nine months ended December 31, 2013 are as follows (in thousands):

 

Balance, beginning of the period

 

$

2,299

 

Standard warranty provision

 

2,323

 

Changes for accrual related to reliability repair programs

 

1,054

 

Deductions for warranty claims

 

(2,911

)

Balance, end of the period

 

$

2,765