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Product Warranty
 12 Months Ended
Dec. 31, 2011
Product Warranties Disclosures [Abstract]  
Product Warranty and Indemnification
Product Warranty and Indemnification
As of December 31, 2011 and 2010, MRV's product warranty liability recorded in accrued liabilities was $1.3 million and $1.0 million, respectively. The following table summarizes the activity related to the product warranty liability (in thousands):
 
 
Balance at
beginning
of period
 
Charged to
expense, net
 
Deductions
 
Foreign currency impact
 
Balance at
end of
period
December 31, 2009
 
$
1,459

 
318

 
(517
)
 
(3
)
 
$
1,257

December 31, 2010
 
$
1,257

 
(139
)
 
(107
)
 
13

 
$
1,024

December 31, 2011
 
$
1,024

 
827

 
(524
)
 
(6
)
 
$
1,321

MRV accrues for warranty costs as part of its cost of sales based on associated material product costs, technical support labor costs and associated overhead. The products sold are generally covered by a warranty for periods of one to two years.
In the normal course of business to facilitate sales of its products, MRV indemnifies other parties, including customers, lessors and parties to other transactions with us, with respect to certain matters. The Company has agreed to hold the other party harmless against losses arising from a breach of representation or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim.
In addition, the Company has indemnification obligations to its current and former officers, directors, employees and agents, as set forth in the Company's bylaws.
MRV cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these obligations. Over the last decade, the Company has not incurred any significant expense as a result of obligations of this type that were not otherwise covered by our insurance policies. Accordingly, the Company has not accrued any amounts for such indemnification obligations. However, there can be no assurances that expenses will not be incurred under these indemnification provisions in the future.