Annual report pursuant to Section 13 and 15(d)

Accrued Expenses and Other Liabilities

v3.22.4
Accrued Expenses and Other Liabilities
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Accrued Expenses and Other Liabilities Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following:
December 31,
2022 2021
(dollars in thousands)
Land development and home construction accrual $ 39,716  $ 22,082 
Warranty reserve and general liability 46,657  15,692 
Accrued compensation and benefits 18,920  14,913 
Lease liabilities 16,428  13,190 
Sales tax payable 1,448  2,885 
Income tax payable 3,420  12,079 
Interest payable 4,351  2,494 
Deferred revenue —  3,969 
Homebuyer deposits 15,046  7,825 
Other deposits and liabilities 3,440  2,595 
Total accrued expenses and other liabilities $ 149,426  $ 97,724 
As of December 31, 2021, the Company had $4.0 million of deferred revenue related to lot sales and other revenue included in accrued expenses and other liabilities in the Company’s consolidated balance sheets. The Company reduces these liabilities and recognizes revenue as development progresses and the related performance obligations are completed. The Company recognized $4.0 million of lot sales and other revenue during the year ended December 31, 2022 related to the deferred revenue balance as of December 31, 2021. As of December 31, 2022 the Company had no deferred revenue.
Warranty—Estimated future direct warranty reserve and general liability costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Changes in the Company’s warranty reserve and general liability are detailed in the table below:
December 31,
2022 2021
(dollars in thousands)
Beginning warranty reserve and general liability $ 15,692  $ 11,730 
Adjustments (1)
18,018  — 
Provision (2)
16,114  6,013 
Payments (3,167) (2,051)
Ending warranty reserve and general liability $ 46,657  $ 15,692 
(1)    In accordance with ASC 210, Balance Sheet, the Company presented warranty reserve and general liability on a gross basis within the consolidated balance sheet as of December 31, 2022, and presented anticipated insurance recoveries within other assets. Previously, the Company presented the warranty reserve and general liability within accrued expenses and other liabilities, net of anticipated insurance recoveries. This resulted in an adjustment of $18.0 million to beginning warranty reserve and general liability on January 1, 2022 with a corresponding increase in warranty and general liability insurance receivables.
(2)    The provision amount for the year ended December 31, 2022 includes $3.8 million associated with Hanover, which we acquired on January 18, 2022.