Financial Statement Information Warranty Reserve (Policies)

3 Months Ended

Mar. 31, 2021

Standard Product Warranty And Extended Product Warranty Policy Policy [Policy Text Block]

Warranty Reserve

Some of our salvage mechanical products are sold with a standard six month warranty against defects. Additionally, some of our remanufactured engines are sold with a standard three or four year warranty against defects. We also provide a limited lifetime warranty for certain of our aftermarket products. These assurance-type warranties are not considered a separate performance obligation, and thus no transaction price is allocated to them. We record the warranty costs in Cost of goods sold in our Unaudited Condensed Consolidated Statements of Income. Our warranty reserve is calculated using historical claim information to project future warranty claims activity and is recorded within Other accrued expenses and Other noncurrent liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments.

The changes in the warranty reserve are as follows (in thousands):


Balance as of December 31, 2020	$	27,914
Warranty expense	18,470
Warranty claims	(17,917)
Balance as of March 31, 2021	$	28,467