NOTE 7—ACCRUED LIABILITIES AND DEFERRED REVENUE

Accrued liabilities are comprised of the following (in thousands):

	June 30,		December 31,
	2015		2014
Payroll and benefits	$	2,384	$	1,905
Warranty accrual, current portion		1,129		930
Taxes		339		139
Accrued professional services		1,672		1,581
Accrued capital lease payments		157		—
Accrued insurance premium		53		450
Other		179		183
Total accrued liabilities	$	5,913	$	5,188

Changes in the initial product warranty accrual, and the expenses incurred under the Company’s initial and extended warranties, for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Initial warranty accrual, beginning balance	$	1,667		$	1,025		$	1,449		$	1,096
Provision for estimated warranty cost		545			461			996			609
Warranty expenditures		(215	)		(231	)		(448	)		(450	)
		1,997			1,255			1,997			1,255
Less warranty accrual, long-term		868			247			868			247
Total warranty accrual, current portion	$	1,129		$	1,008		$	1,129		$	1,008

In June 2014, the Company extended the warranty for WaterLase systems from one year to two years for systems purchased after January 1, 2014.

Current portion of deferred revenue is comprised of the following (in thousands):

	June 30,		December 31,
	2015		2014
Undelivered elements (training, installation, and product and support services)	$	1,636	$	952
Extended warranty contracts		1,414		1,542
Deferred revenue, current portion	$	3,050	$	2,494

In connection with the Company’s initiatives to measure and improve customer satisfaction and concurrent with the launch of WaterLase iPlus 2.0 in February 2015, the Company introduced its exclusive Practice Growth Guarantee, which is a program that essentially guarantees growth in the Company’s clients’ dental practices through training on a select number of clinical procedures and with billing and marketing support for dentists included. Consistent with the Company’s standard terms and conditions applicable to all of its products, the Practice Growth Guarantee does not give the customer the right to return purchased laser systems or receive a refund of any amount of the purchase price. However, the Practice Growth Guarantee does provide for additional training opportunities and certain billing and marketing support activities to the customer. The Company has estimated additional deferred revenue related to the Practice Growth Guarantee for all WaterLase iPlus 2.0 system sales during the six months ended June 30, 2015 to be approximately $94,000.