Product Warranty and Indemnification

12 Months Ended

Dec. 31, 2013

Product Warranties Disclosures [Abstract]

As of December 31, 2013 and December 31, 2012, MRV's product warranty liability recorded in accrued liabilities was $0.6 million and $1.0 million, respectively. The following table summarizes the activity related to the product warranty liability (in thousands):



	Beginning balance		Cost of warranty claims	Accruals for product warranties	Foreign currency translation adjustment	Balance at end of period
December 31, 2011	$	861	790	(524)	(1)	1,126
December 31, 2012	$	1,126	(150)	30	0	1,006
December 31, 2013	$	1,006	(321)	(107)	0	578

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 90 days to three 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 parties harmless against losses arising from a breach of representation or covenants, for 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.