BIOLASE, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Estimated Useful Lives of Property, Plant and Equipment

The cost of property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives of the respective assets, except for leasehold improvements, which are depreciated over the lesser of the estimated useful lives of the respective assets or the related lease terms.

Building	30 years
Leasehold improvements	3 to 5 years
Equipment and computers	3 to 5 years
Furniture and fixtures	5 years

Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties

Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties for the years ended December 31 are included within accrued liabilities on the Consolidated Balance Sheets and were as follows (in thousands):

	Years Ended December 31,
	2015			2014			2013
Initial warranty accrual, beginning balance	$	1,449		$	1,096		$	1,699
Provision for estimated warranty cost		1,715			1,214			475
Warranty expenditures		(976	)		(861	)		(1,078	)
Initial warranty accrual, ending balance		2,188			1,449			1,096
Less warranty accrual, long-term		843			519			—
Total warranty accrual, current portion	$	1,345		$	930		$	1,096

Summary of Income Statement Classification of Compensation Expense

The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands):

Assumptions on Estimation of Stock Option Fair Values

The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions:

	2015			2014			2013
Expected term (years)		5.80			3.83			3.65
Volatility		90	%		94	%		84	%
Annual dividend per share	$	—		$	—		$	—
Risk-free interest rate		1.64	%		1.66	%		1.04	%