Warranty Reserves

3 Months Ended

Mar. 31, 2013

Warranty Reserves

7. 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 shows the changes in accrued warranty expense for the three months ended March31, 2012 and 2013:

	For the three months ended
	March 31,
	2012	2013
	(Unaudited)	(Unaudited)
Beginning balance	$135,708	$115,566
Additions	27,763	19,572
Usage	(21,075)	(27,549)
Ending balance	$142,396	$107,589