Inventories are stated at the lower of cost, determined on the first-in, first-out (“FIFO”) basis, or net realizable value. Extreme uses a standard cost methodology to determine the cost basis for its inventories. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company adjusts the carrying value of its inventory when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any previously written down or obsolete inventory subsequently sold has not had a material impact on gross margin for any of the periods presented.

	September 30, 2022		June 30, 2022
Finished goods	$	45,534	$	40,733
Raw materials		6,232		8,498
Total inventories	$	51,766	$	49,231

	September 30, 2022			June 30, 2022
Computers and equipment	$	76,535		$	75,387
Purchased software		48,397			47,161
Office equipment, furniture and fixtures		9,428			9,463
Leasehold improvements		52,460			52,564
Total property and equipment		186,820			184,575
Less: accumulated depreciation and amortization		(138,868	)		(134,997	)
Property and equipment, net	$	47,952		$	49,578

Deferred revenue represents amounts for deferred maintenance, support, SaaS, and other deferred revenue including professional services and training when the revenue recognition criteria have not been met.

The majority of the Company’s hardware products are shipped with either a one-year warranty or a limited lifetime warranty, and software products receive a 90-day warranty. Upon shipment of products to its customers, the Company estimates expenses for the cost to repair or replace products that may be returned under warranty and accrues a liability in cost of product revenues for this amount. The determination of the Company’s warranty requirements is based on actual historical experience with the product or product family, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.

The following table summarizes the activity related to the Company’s product warranty liability during the three months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended
	September 30, 2022			September 30, 2021
Balance beginning of period	$	10,852		$	11,623
Warranties assumed due to acquisition		—			41
New warranties issued		4,008			2,710
Warranty expenditures		(3,338	)		(3,594	)
Balance end of period	$	11,522		$	10,780

To facilitate sales of its products in the normal course of business, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising for intellectual property infringement and certain other losses. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position.

The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting of accounts receivable. See Note 3, Revenues, for the Company’s accounts receivable concentration. The Company does not invest an amount exceeding 10% of its combined cash in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts.