Warranty Reserves

9 Months Ended

Sep. 30, 2011

Warranty Reserves [Abstract]

Warranty Reserves

NOTE 9.     WARRANTY RESERVES

We provide for the estimated cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. As we sell new instruments, our provision for warranty expense increases. Cost of product revenue reflects not only estimated warranty expense for the systems sold in the current period, but also any changes in estimated warranty expense for the installed base that results from our quarterly evaluation of service experience. Our actual warranty obligation is affected by instrument performance in the customers' environment and costs incurred in servicing instruments. Should actual service rates or costs differ from our estimates, which are based on historical data and projections of future costs, revisions to our estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying condensed consolidated balance sheets.

The following is a summary of changes in accrued warranty reserves for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2011			2010			2011			2010
Balance, beginning of period	$	1,675		$	2,597		$	2,196		$	3,104
Provision for warranty expense		668			740			1,763			2,296
Change in estimate, balance beginning of period		(172	)		(463	)		(394	)		(1,021	)
Settlement of warranty liability		(604	)		(760	)		(1,998	)		(2,265	)
Balance, end of period	$	1,567		$	2,114		$	1,567		$	2,114