Extended Maintenance Contracts

9 Months Ended

Sep. 30, 2023

Extended Maintenance Contracts

Extended Maintenance Contracts

4. Extended Maintenance Contracts

On a quarterly basis, we evaluate any potential losses related to our extended maintenance contracts for fuel cell systems, related infrastructure and equipment that have been sold. The following table shows the roll forward of balances in the accrual for loss contracts, including changes due to the provision for loss accrual, releases to service cost of sales, releases due to the provision for warrants, and foreign currency translation adjustment (in thousands):

	Nine Months Ended		Year Ended
	September 30, 2023		December 31, 2022
Beginning balance	$	81,066	$	89,773
Provision for loss accrual		55,194		23,295
Releases to service cost of sales		(19,908)		(35,446)
Increase to loss accrual related to customer warrants		607		3,506
Foreign currency translation adjustment		(59)		(62)
Ending balance	$	116,900	$	81,066

The Company increased its provision for loss accrual to $55.2 million for the nine months ended September 30, 2023 due to continued cost and inflationary increases of labor, parts and related overhead coupled with the timing of the remaining period of service required. As a result, the Company increased its estimated projected costs to service existing fuel cell systems and the related infrastructure.