Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2012

Accrued Expenses And Other Current Liabilities [Text Block]

5.       Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	September 30, 2012	December 31, 2011
Accrued salaries and benefits	$ 1,852	$ 1,486
Sales tax payable	227	566
Accrued warranty	596	645
Deferred revenue	─	650
Liability for consigned precious metals	987	652
Other	966	916
Accrued expenses and other current liabilities	$ 4,628	$ 4,915

On May 2, 2011, the Company entered into an agreement with Tanaka Kikinzoku Kogyo K.K. ("TKK"), its investment partner in the Asia Pacific, to provide equipment, engineering and support services to assist in TKK’s establishment of manufacturing operations in China under a joint venture between TKK and a Chinese entity for the purpose of manufacturing and selling diesel and automotive exhaust emission products in the China market. The Company received an up-front payment of $0.6 million which was included in deferred revenue at December 31, 2011. In September 2012, the Company and TKK entered into an amendment to the agreement reducing the scope of services under the contract resulting in a change in the total value of the contract from $1.5 million to $1.0 million.  

The Company accounted for this contract under ASC 605-35, “Revenue Recognition – Construction-type and Production-type Contracts” under the completed-contract method. As of September 30, 2012, the Company has completed its obligations under the agreement, as amended. As such, the Company has recognized $1.0 million in revenue, including the $0.6 million previously deferred, and $0.3 million in cost of revenues in the three and nine months ended September 30, 2012.