Invacare 2008 Annual Report Download - page 85

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Current Liabilities
Accrued expenses as of December 31, 2008 and 2007 consist of the following (in thousands):
2008 2007
Accrued salaries and wages .................................................. $ 40,819 $ 41,851
Accrued taxes other than income taxes, primarily Value Added Taxes ................ 24,684 29,721
Accrued warranty cost ...................................................... 16,798 16,616
Accrued interest ........................................................... 11,792 11,926
Accrued freight ........................................................... 15,076 10,036
Accrued rebates ........................................................... 3,567 7,420
Accrued legal and professional ............................................... 3,135 3,927
Accrued product liability, current portion ....................................... 4,024 3,556
Accrued insurance ......................................................... 2,466 2,071
Accrued severance ......................................................... 773 1,224
Accrued derivative liability .................................................. 4,456 78
Other accrued items, principally trade accruals .................................. 16,022 17,532
$143,612 $145,958
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 EITF No. 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor’s Products). The company has experienced significant pricing pressure in the U.S. market
for standard products in recent years and has partially reduced prices to our customers in the form of a volume
rebate such that the rebates would typically apply only if customers increased their standard product purchases
from the company.
Changes in accrued warranty costs were as follows (in thousands):
2008 2007
Balance as of January 1 ...................................................... $16,616 $15,165
Warranties provided during the period .......................................... 11,705 10,253
Settlements made during the period ............................................. (12,364) (9,538)
Changes in liability for pre-existing warranties during the period, including expirations . . . 841 736
Balance as of December 31 ................................................... $16,798 $16,616
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