Note 5. Commitments and Contingent Liabilities

6 Months Ended

Dec. 31, 2013

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingencies Disclosure

Commitments and Contingent Liabilities

Standby letters of credit are issued to third-party suppliers, lessors, and insurance institutions and can only be drawn upon in the event of Kimball's failure to pay its obligations to a beneficiary. As of December 31, 2013, we had a maximum financial exposure from unused standby letters of credit totaling $1.1 million. We are not aware of circumstances that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of December 31, 2013 with respect to the standby letters of credit. Kimball also enters into commercial letters of credit to facilitate payments to vendors and from customers.

We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability in cases where specific warranty issues become known.

Changes in the product warranty accrual for the six months ended December 31, 2013 and 2012 were as follows:

	Six Months Ended
	December 31
(Amounts in Thousands)	2013			2012
Product Warranty Liability at the beginning of the period	$	2,384		$	2,251
Additions to warranty accrual (including changes in estimates)	1,900			511
Settlements made (in cash or in kind)	(879		)	(441		)
Product Warranty Liability at the end of the period	$	3,405		$	2,321