Revenues and Expenses Revenues from contracts for the design, manufacture and sale of asphalt plants are recognized under the percentage-of-completion method. The percentage-of-completion method of accounting for these contracts recognizes revenue, net of any promotional discounts, and costs in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred during the entire contract. Pre-contract costs are expensed as incurred. Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined. Revenue recognized in excess of amounts billed is classified as current assets under costs and estimated earnings in excess of billings. The Company anticipates that all incurred costs associated with these contracts at September 30, 2018, will be billed and collected within one year. Revenues from all other contracts for the design and manufacture of custom equipment, for service and for parts sales, net of any discounts and return allowances, are recorded when the following four revenue recognition criteria are met: product is delivered/ownership is transferred or service is performed, persuasive evidence of an arrangement exists, the selling price is fixed or determinable, and collectability is reasonably assured. Product warranty costs are estimated using historical experience and known issues and are charged to production costs as revenue is recognized. Changes in the accrual for warranty and related costs are composed of the following: 2018 2017 Balance, beginning of year $ 412,000 $ 401,000 Warranties issued 225,000 400,000 Warranties settled (237,000 ) (389,000 ) Balance, end of year $ 400,000 $ 412,000 All product engineering and development costs, and selling, general and administrative expenses are charged to operations as incurred. Provision is made for any anticipated contract losses in the period that the loss becomes evident. The allowance for doubtful accounts is determined by performing a specific review of all account balances greater than 90 days past due and other higher risk amounts to determine collectability, and also adjusting for any known customer payment issues with account balances in the less-than-90-day past due aging category. Account balances are charged off against the allowance for doubtful accounts when they are determined to be uncollectable. Any recoveries of account balances previously considered in the allowance for doubtful accounts reduce future additions to the allowance for doubtful accounts. The allowance for doubtful accounts also includes an estimate for returns and allowances. Provisions for estimated returns and allowances and other adjustments, are provided for in the same period the related sales are recorded. Returns and allowances, which reduce product revenue, are estimated using known issues and historical experience. Changes in the allowance for doubtful accounts are composed of the following: 2018 2017 Balance, beginning of year $ 207,000 $ 195,000 Provision for doubtful accounts 210,000 115,000 Provision for estimated returns and allowances 265,000 385,000 Uncollectible accounts written-off (76,000 ) (16,000 ) Returns and allowances issued (293,000 ) (472,000 ) Balance, end of year $ 313,000 $ 207,000