Quarterly report pursuant to Section 13 or 15(d)

Warranty

v3.2.0.727
Warranty
6 Months Ended
Jun. 30, 2015
Warranty [Abstract]  
Warranty

 

NOTE 7 – WARRANTY

 

We provide reserves for the estimated cost of product warranties at the time revenue is recognized.  We estimate the costs of our warranty obligations based on our warranty policy or applicable contractual warranty, historical experience of known product failure rates, and use of materials and service delivery costs incurred in correcting product failures.  Management reviews the estimated warranty liability on a quarterly basis to determine its adequacy.  The actual warranty expense could differ from the estimates made by the Company based on product performance.

 

The following table presents the changes in the Company’s warranty liability for the six-month periods ended June 30, 2015 and 2014, respectively, the majority of which relates to a five-year obligation to provide for potential future liabilities for network equipment sales.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

2014

Beginning balance

 

$

434,000 

 

$

564,000 

Amounts charged to expense

 

 

174,000 

 

 

(10,000)

Actual warranty costs paid

 

 

(50,000)

 

 

(60,000)

Ending balance

 

$

558,000 

 

$

494,000