Current Liabilities

Accrued expenses as of December 31, 2013 and 2012 consisted of accruals for the following (in thousands):



	2013		2012
Salaries and wages	$	40,252	$	41,813
Taxes other than income taxes, primarily Value Added Taxes	24,525		24,600
Warranty cost	27,393		21,451
Freight	7,636		7,853
Professional	6,516		7,595
Product liability, current portion	3,183		3,323
Rebates	1,681		3,635
Insurance	2,549		2,674
Interest	1,041		1,268
Derivative liability (foreign forward exchange contracts)	1,212		1,373
Severance	3,986		5,211
Other items, principally trade accruals	13,126		14,393
	$	133,100	$	135,189

Accrued rebates relate to several volume incentive programs the Company offers its customers. The Company accounts for these rebates as a reduction of revenue when the products are sold in accordance with the guidance in ASC 605-50, Customer Payments and Incentives.

Changes in accrued warranty costs were as follows (in thousands):



	2013			2012
Balance as of January 1	$	21,451		$	19,842
Warranties provided during the period	10,831			11,298
Settlements made during the period	(13,452		)	(13,002		)
Changes in liability for pre-existing warranties during the period, including expirations	8,563			3,313
Balance as of December 31	$	27,393		$	21,451

The increase in the liability for pre-existing warranties in 2013 is primarily the result of product recalls. The warranty accrual as of December 31, 2013 includes anticipated warranty expense related to the power wheelchair joystick recall of $7,264,000 pre-tax ($7,170,000 after-tax), which primarily impacted the Asia/Pacific ($4,639,000) and the North America/HME segment ($2,625,000). The warranty accrual related to the power wheelchair joystick recall was increased during the fourth quarter of 2013 principally as a result of the commencement of the recall in the quarter and the realization that the number of replacement units required was trending higher than the Company's original estimates, which were based on historical information related to previous recalls. The effect of this change in estimate increased warranty expense by $3,402,000 ($3,308,000 after-tax) in the fourth quarter of 2013. The Company will continue to review the adequacy of the joystick recall accrual as the recall progresses.