Product Warranty

12 Months Ended

Dec. 31, 2018

Product Warranty

Product Warranty

Note 10. Product Warranty

We generally offer a one year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer the portion of systems revenue attributable to the fair value of non‑standard warranty. Costs for non‑standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjusts the amount as necessary.

The changes in our product warranty liability are as follows:

	Year ended December 31,
	2018		2017		2016
	(in thousands)
Balance at January 1 (beginning of year)	$	4,502	$	2,666	$	3,555
Warranties issued during the period		5,421		5,671		3,125
Settlements made during the period		(5,903)		(2,603)		(4,249)
Changes in estimate of liability for pre-existing warranties during the period		1,071		(1,232)		235
Balance at December 31 (end of period)	$	5,091	$	4,502	$	2,666
Amount classified as current	$	4,819	$	4,112	$	2,426
Amount classified as long-term		272		390		240
Total warranty liability	$	5,091	$	4,502	$	2,666