Quarterly report pursuant to Section 13 or 15(d)

Accrued Warranty Reserve

Accrued Warranty Reserve
3 Months Ended
Jun. 30, 2011
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 eighteen 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 to address reliability repairs on products no longer in warranty when, in the Company’s judgment, and in accordance with a specific plan developed by the Company, 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 first quarter of Fiscal 2012 are as follows (in thousands):


Balance, March 31, 2011





Standard warranty provision




Changes for accrual related to reliability repair programs




Deductions for warranty claims




Balance, June 30, 2011