Note 13 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

13.

     Commitments and Contingencies

Fuel Tech is subject to various claims and contingencies related to, among other things, workers compensation, general liability (including product liability), and lawsuits. The Company records liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when

no

amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is

not

probable or the amount is

not

estimable, or both, if there is a reasonable possibility that a material loss

may

have been incurred.

From time to time we are involved in litigation with respect to matters arising from the ordinary conduct of our business. In the opinion of management, based upon presently available information, either adequate provision for anticipated costs have been accrued or the ultimate anticipated costs will

not

materially affect our consolidated financial position, results of operations, or cash flows.  We do

not

believe we have any pending loss contingencies that are probable or reasonably possible of having a material impact on our consolidated financial position, results of operations or cash flows.

During the

fourth

quarter of

2018,

the Company was notified of certain non-conformance issues with a U.S. customer associated with equipment that requires remedy under the warranty provision of the contract. During the

second

quarter of

2020

a charge of

$1,150

to remedy this non-conformance issue was incurred. Offsetting this amount was a reversal of

$499

of expense to reduce the allowance of doubtful accounts that had been previously reserved. The Company has completed all work associated with this issue. As of

September 30, 2020

and

December 31, 2019,

we have

$0

and

$146

of accrued liability associated with the completion of the non-conformance issues in the other accrued liabilities line of the Consolidated Balance Sheets.  During the

third

quarter of

2020,

the Company settled an outstanding claim with our insurance provider for these remediation efforts and recorded a receivable in the amount of

$2,589.

The settlement is recorded in the cost of sales line on the Consolidated Statement of Operations and in the Insurance Receivable line in the current asset section of the Consolidated Balance Sheets. Collection of the funds was completed in

October 2020.

During the

third

quarter of

2020,

the Company was notified of an equipment component failure at a foreign customer location.  The failure is under investigation and will be remedied under the warranty provision of the contracts that are in place with the customer and supplier.  As of

September 30, 2020

a charge of

$238

was recorded in the accounts payable line of the Consolidated Balance Sheets.  

Fuel Tech issues a standard product warranty with the sale of its products to customers. Our recognition of warranty liability is based primarily on analyses of warranty claims experienced in the preceding years as the nature of our historical product sales for which we offer a warranty are substantially unchanged. This approach provides an aggregate warranty accrual that is historically aligned with actual warranty claims experienced.

There was

no

change in the warranty liability balance included in the other accrued liabilities line of the Consolidated Balance Sheets during the

nine

months ended

September 30, 2020

and

2019.

The warranty liability balance was

$159

at

September 30, 2020

and

2019.