Archived Copies of Warranty Week

December 2002 to Today

ASC 606 Causes Warranty Accounting Changes: Though it's mainly about revenue recognition, ASC 606 also forces manufacturers and retailers to separate product warranty from extended warranty, and account for each differently. But to get there, the FASB confuses the issue with new terminology and vague concepts.
December 20, 2018
Solar Equipment Warranty Expense Rates: It's a bit of an actuarial nightmare. Relatively young companies in new and unproven industries issue very long warranties for which multiple years or even decades can pass before claims arise in volume. But eventually, products mature and claims exceed accruals, and reserves begin to deplete. Then the actuaries break the bad news: it's time to raise rates.
August 30, 2018
Extended Warranty Image Problems, Part 2: More than a debate about terminology, what the industry needs is a spokesman (or woman) who can defend the value and convenience of protection plans. Service is becoming a major issue for both manufacturers and retailers, and letting attacks on the service contract industry go undefended is no longer acceptable.
September 26, 2013
Truck Warranties: Unlike passenger cars, the truck OEM isn't usually responsible for the vehicle's entire warranty. Instead, many of the suppliers and component manufacturers issue their own warranties, and pay their own claims.
January 19, 2012
Lifetime Warranties: Companies are free to define a lifetime any way they wish, but they have to be clear about their rules and their exclusions. Some issue the warranty to just the first owner of the product. Others qualify it with words such as reasonable or useful. And some high-tech companies spell out a policy under which the warranty's lifetime will end after sales cease and spare parts run out.
August 13, 2009
Auto Warranty Trends: While the RV makers are imploding, the farm vehicle makers are thriving. Somewhere in between are the passenger car and light truck makers, for whom warranty has become an important issue in the government bailout. But the 1.9% gap in warranty costs between OEMs and their suppliers remains firmly in place.
March 19, 2009
Television Warranties: Bigger is usually better, when it comes to TV warranties. While the old tube TVs are more or less disposable, flat screen vendors usually either fix them in the home or send someone out to pick up the units that fail. And while a year is the most common warranty period, several TV manufacturers issue multi-year warranties on their premium lines.
September 7, 2006
Controlling Warranty Costs and Exposure: Using Early Warning Systems,
Warranty Becomes a Board-level Issue
January 5, 2004
Letter to the Editor: Reader raises an issue with the data for warranty reserves, claims, and accrual statistics published over the past five weeks, suggesting the use of just printer hardware revenue to compute a claims rate paints a misleading picture.
October 13, 2003