Warranty Reserves

9 Months Ended

Sep. 30, 2011

6. Warranty Reserves

Reserves are provided for the estimated warranty costs when revenue is recognized. The costs of warranty obligations are estimated based on warranty policy or applicable contractual warranty, historical experience of known product failure rates and use of materials and service delivery charges incurred in correcting product failures. Specific warranty accruals may be made if unforeseen technical problems arise. If actual experience, relative to these factors, significantly differs from these estimates, additional warranty expense may be required.

The following table below shows the changes in accrued warranty expense for the three and nine months ended September 30, 2010 and 2011:


	For the three months ended						For the nine months ended
	September 30,						September 30,
	2010			2011			2010			2011
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Beginning balance	$	214,123		$	172,583		$	155,850		$	155,918
Additions		8,790			62,241			72,358			196,354
Usage		(49,661	)		(62,056	)		(54,956	)		(179,504	)

Ending balance	$	173,252		$	172,768		$	173,252		$	172,768