Accrued expenses consist of accruals for the following (in thousands):



	September 30, 2016		December 31, 2015
Salaries and wages	$	35,483	$	41,216
Warranty cost	24,744		22,820
Taxes other than income taxes, primarily value added taxes	19,903		21,424
Professional	6,880		5,774
Freight	6,772		5,978
Product liability, current portion	3,564		3,127
Severance	1,698		2,477
Interest	1,694		872
Deferred revenue	1,525		400
Supplemental Executive Retirement Program liability	1,279		1,279
Derivative liabilities	1,137		2,014
Rent	932		402
Insurance	909		695
Rebates	560		1,791
Other items, principally trade accruals	11,604		8,687
Accrued Expenses	$	118,684	$	118,956

Accrued rebates relate to several volume incentive programs the company offers its customers. The company accounts for these rebates as a reduction of revenue when the products are sold in accordance with the guidance in ASC 605-50, Customer Payments and Incentives.

Generally, the company's products are covered by warranties against defects in material and workmanship for various periods depending on the product from the date of sales to the customer. Certain components carry a lifetime warranty. A provision for estimated warranty cost is recorded at the time of sale based upon actual experience. The company continuously assesses the adequacy of its product warranty accrual and makes adjustments as needed. Historical analysis is primarily used to determine the company's warranty reserves. Claims history is reviewed and provisions are adjusted as needed. However, the company does consider other events, such product field actions and recalls, which could warrant additional warranty reserve provision.

In 2016, the company recorded additional warranty expense of $1,220,000 for a product recall which was related to a component on a lifestyles product, recorded in the North America/HME segment, and an additional warranty expense of $1,670,000 for a component of a lifestyles product which was recorded in the European segment. The company's warranty reserves are subject to adjustment in future periods to the extent that new developments change the company's estimate of the total cost of these matters.

The following is a reconciliation of the changes in accrued warranty costs for the reporting period (in thousands):




Balance as of January 1, 2016	$	22,820
Warranties provided during the period	9,714
Settlements made during the period	(11,585		)
Changes in liability for pre-existing warranties during the period, including expirations	3,795
Balance as of September 30, 2016	$	24,744