Deferred Warranty Revenue and Warranty Reserve

12 Months Ended

Dec. 31, 2017

Deferred Warranty Revenue and Warranty Reserve

Deferred Warranty Revenue and Warranty Reserve

Note 7 – Deferred Warranty Revenue and Warranty Reserve

Our standard practice is to provide a warranty on our DIGIPASS hardware for one to two years after the date of purchase. Customers may purchase extended warranties covering periods from one to four years after the standard warranty period. We defer the revenue associated with the extended warranty and recognize it into income on a straight-line basis over the extended warranty period. The estimated cost of providing warranty services during the extended warranty period is less than the revenue related to such warranty service.

Deferred warranty revenue at December 31, 2017 will be recognized as revenue as follows:

Year	Amount
2018	$	12
2019		3
Total	$	15

We maintain a reserve for the potential cost of future warranty claims related to products sold and recognized in revenue. The reserve is included in accrued expenses. Activity in the warranty reserve account during the three years ended December 31, 2017 was as follows:

	For the year ended December 31,
	2017		2016		2015
Balance, beginning of period	$	153	$	43	$	85
Provision for warranty claims		80		165		165
Product or cash issued to settle claims		(139)		(55)		(207)
Balance, end of period	$	94	$	153	$	43