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Chapter-III-Warranty-Liability-Module 86c360988 a054efe5143d15039 e0ecb6
BS Accountancy (BAACC1)
Mindanao State University
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SUBJECT INTERMEDIATE ACCOUNTING II
CHAPTER Chapter 3
LESSON TITLE Liabilities
LESSON OBJECTIVES At the end of this module, you will be able to; 1. Describe the nature and purpose of warranty. 2. Describe the recognition of an estimate liability. 3. Explain the measurement of an estimated warranty liability and apply it. 4. Evaluate the reasonableness of an estimated warranty liability
ABSTRACTION
What Is a Warranty?
A warranty, according to the Merriam-Webster Dictionary, is “a usually written guarantee of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts”.
Simply put, by issuing a warranty, a seller says the product will function as claimed, and if not, the seller will repair or replace defective parts. When you make a big purchase, the manufacturer or seller makes an important commitment to stand behind the product. Both in the US and the UK, this is called a manufacturer warranty, however sometimes in the UK it's also called a guarantee.
Consumer Product and Service Warranties in the Philippines
When it comes to consumer product and service warranties in the Philippines, the implementing agency that will strictly enforce the provision of chapter III of RA no. 7394’s implementing rules and regulations is the Department of Trade and Industry (DTI).
The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties. In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the sale of consumer products with warranty:
a) Terms of express warranty. — Any seller or manufacturer who gives an express warranty shall: 1. set forth the terms of warranty in clear and readily understandable language and clearly identify himself as the warrantor; 2. identify the party to whom the warranty is extended; 3. state the products or parts covered; 4. state what the warrantor will do in the event of a defect, malfunction of failure to conform to the written warranty and at whose expense; 5. state what the consumer must do to avail of the rights which accrue to the warranty; and 6. stipulate the period within which, after notice of defect, malfunction or failure to conform to the warranty, the warrantor will perform any obligation under the warranty.
b) Express warranty — operative from moment of sale. — All written warranties or guarantees issued by a manufacturer, producer, or importer shall be operative from the moment of sale.
Sales Report. — All sales made by distributors of products covered by this Article shall be reported to the manufacturer, producer, or importer of the product sold within thirty (30) days from date of purchase, unless otherwise agreed upon. The report shall contain, among others, the date of purchase, model of the product bought, its serial number, name and address of the buyer. The report made in accordance with this provision shall be equivalent to a warranty registration with the manufacturer, producer, or importer. Such registration is sufficient to hold the manufacturer, producer, or importer liable, in appropriate cases, under its warranty.
Failure to make or send report. — Failure of the distributor to make the report or send them the form required by the manufacturer, producer, or importer shall relieve the latter of its liability under the warranty: Provided, however, That the distributor who failed to comply with its obligation to send the sales report shall be personally liable under the warranty. For this purpose, the manufacturer shall be obligated to make good the warranty at the expense of the distributor.
Retail. — The retailer shall be subsidiarily liable under the warranty in case of failure of both the manufacturer and distributor to honor the warranty. In such case, the retailer shall shoulder the expenses and costs necessary to honor the warranty. Nothing therein shall prevent the retailer from proceeding against the distributor or manufacturer.
Enforcement of warranty or guarantee. — The warranty rights can be enforced by presentment of a claim. To this end, the purchaser needs only to present to the immediate seller either the warranty card or the official receipt along with the product to be serviced or returned to the immediate seller. No other documentary requirement shall be demanded from the purchaser. If the immediate seller is the manufacturer’s factory or showroom, the warranty shall immediately be honored. If the product was purchased from a distributor, the distributor shall likewise immediately honor the warranty. In the case of a retailer other than the distributor, the former shall take responsibility without cost to the buyer of presenting the warranty claim to the distributor in the consumer’s behalf.
Record of purchases. — Distributors and retailers covered by this Article shall keep a record of all purchases covered by a warranty or guarantee for such period of time corresponding to the lifetime of the product’s respective warranties or guarantees.
Contrary stipulations — null and void. — All covenants, stipulations or agreements contrary to the provisions of this Article shall be without legal effect.
c) Designation of warranties. — A written warranty shall clearly and conspicuously designate such warranty as: 1. “Full warranty” if the written warranty meets the minimum requirements set forth in paragraph (d); or 2. “Limited warranty” if the written warranty does not meet such minimum requirements.
d) Minimum standards for warranties. — For the warrantor of a consumer product to meet the minimum standards for warranty, he shall: 1. remedy such consumer product within a reasonable time and without charge in case of a defect, malfunction or failure to conform to such written warranty;
- permit the consumer to elect whether to ask for a refund or replacement without charge of such product or part, as the case may be, where after reasonable number of attempts to remedy the defect or malfunction, the product continues to have the defect or to malfunction.
The warrantor will not be required to perform the above duties if he can show that the defect, malfunction or failure to conform to a written warranty was caused by damage due to unreasonable use thereof.
e) Duration of warranty. — The seller and the consumer may stipulate the period within which the express warranty shall be enforceable. If the implied warranty on merchantability accompanies an express warranty, both will be of equal duration.
Any other implied warranty shall endure not less than sixty (60) days nor more than one (1) year following the sale of new consumer products.
f) Breach of warranties.
b) Any person, natural or juridical, committing any of the illegal acts provided for in Chapter III, except with respect to Article 67, shall be liable for a fine of not less than One thousand pesos (P1,000) but not more than Fifty thousand pesos (P50,000) or imprisonment for a period of at least one (1) year but not more than five (5) years, or both, at the discretion of the court.
The imposition of any of the penalties herein provided is without prejudice to any liability incurred under the warranty or guarantee.
Reasons Why a Warranty Could Be Denied
Warranties typically only apply to products that have not been altered or modified after they were purchased. For example, a warranty on an automobile could be invalidated if the owner added nonstandard parts that substantially altered the functionality, performance, reliability, and stability of the vehicle.
Although it is popular for car aficionados to change engines or make other enhancements to the drivetrain in order to coax a particular type of performance out of the vehicle, such modifications, in most cases, would nullify the warranty. When such aftermarket adjustments are made, it can affect the reliability of the vehicle in ways that the dealer and manufacturer are not responsible for.
Each company has its own process for addressing warranties. Even if a product is still within the timeframe designated by a warranty, the company may require multiple points of proof to show that the product failed in the normal course of operational use. If the product failed because of the actions of the owner rather than because of any fault in the design or manufacturing, the warranty is not likely to be honored. For instance, the owner of the product might have placed the product in an extreme environment that was too hot or too cold for its reasonable use.
Warranty in Accounting Perspective: Accounting for warranties under IFRS 15
IFRS Question:
Our company provides 1-year warranty to all our products in line with our legislation, but the client can extend this warranty at 3 years for a fee. Is this a separate performance obligation under IFRS 15? How to account for it?
IFRS Answer It depends. You have to assess each warranty, because some warranties are separate performance obligations and the other one are not. And, the accounting is completely different in both cases.
Types of warranties under IFRS 15
IFRS 15 contains quite a good guidance about warranties. It specifies that there are two basic types of warranties:
Assurance-type warranties – those are warranties that promise to customer that the delivered product is as specified in the contract and will work as specified in the contract. These warranties do NOT give rise to a separate performance obligation , and you account just a provision for warranty repairs under IAS 37.
Service-type warranties – those are warranties that provide something additional to the mere assurance, for example – they provide some extra services.
These warranties give rise to a separate performance obligation , because they provide additional service to the customer and they are accounted for under IFRS 15.
Before you start accounting for warranties, you need to determine what type of warranty you have.
What warranty do you have?
The first thing you need to look at is to see whether your customer has the option to purchase the warranty separately :
If yes , then it’s for sure service-type warranty and you must account for it as for a separate performance obligation.
If not , then you need to see whether the warranty provides something more, some additional service beyond fixing the defects existing at the time of sale.
Here, you need to take a few things into account, such as:
- Is the warranty required by the law?
Many countries have laws that require providing a warranty for some period of time. If your warranty is this type, then it is assurance-type warranty and no, you have no separate performance obligation.
- Is the warranty for longer period than the period required by the law?
If yes, then well, it’s very likely that you have a service-type warranty.
And there are some other things to consider too based on the nature of the product and service you sell. All these factors to consider are NOT determinative. It is just guidance and you need to consider it yourself.
Illustration: Assurance-type vs. service-type warranty
Let’s say that you sell cars. And, let’s say that you have standard cars and luxury cars.
For standard cars, you provide a warranty period of 2 years as required by the local legislation, but for luxury cars, you provide a warranty period of 3 years.
Over these last 2 years, the revenue from extended warranty is recognized as: Debit Contract liability: CU 20 Credit Revenue from sale of warranties: CU 20
What about the cost of repairs in the extended period?
Remember, we are under IFRS 15, not under IAS 37, so no provision is recognized.
Instead, you have to book the costs of warranty repairs when they are incurred as contract costs (costs to fulfill the contract) under IFRS 15.
SALE OF WARRANTY/ SERVICE-TYPE WARRANTY
A warranty is sometimes sold separately from the product. When the products are sold, the customers are entitled to the usual manufacturer’s warranty during a certain period. However, the seller may offer an extended warranty on the product sold but with additional cost.
The sale of the product with the usual warranty is recorded separately from the sale of the extended warranty.
The amount received from the sale of the extended warranty is recognized initially as deferred revenue and subsequently amortized using straight line over the life of the warranty contract.
ILLUSTRATION: SERVICE-TYPE WARRANTY (ADOPTED)
An entity sold a product for P3,000,000. The regular warranty period for the product is two years. The entity sold an additional warranty of two years at a cost of P60,000.
The sale is recorded as follows : Cash 3,060, Sales 3,000, Unearned warranty revenue 60,
The extended warranty contract starts only after the expiration of the regular two-year warranty period.
If the costs are incurred evenly, the unearned warranty revenue is amortized at the end of the third year as follows : Unearned warranty revenue 30, Warranty Revenue (60,000,2years) 30,
Provisions
Provisions in accounting are an amount set aside to cover a probable future expense, or reduction in the value of an asset. Per IAS 37 Provisions, Contingent Liabilities and Contingent Assets, provisions is defined as liabilities of uncertain timing or amount.
Examples of provisions include accruals, asset impairments, bad debts, depreciation, doubtful debts, guarantees (product warranties – assurance-type warranties), income taxes, inventory obsolescence, pension, restructuring liabilities and sales allowances.
A provision should be recognized when, and only when : (a) an entity has a present obligation (legal or constructive) as a result of a past event; (b) it is probable (ie more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation.
Often provision amounts need to be estimated. In financial reporting, provisions are recorded as a current liability on the balance sheet and then matched to the appropriate expense account on the income statement.
Provisions are important because they account for certain company expenses, and payments for them, in the same year. This makes the company’s financial statements more accurate.
Provisions are not a form of savings. Because the expense is ‘probable’, the amount set aside is expected to be spent.
Loss Contingencies - Due to conservative accounting principles, loss contingencies are reported on the balance sheet and footnotes on the financial statements, if they are probable and their quantity can be reasonably estimated. - The likelihood of the loss is described as probable, reasonably possible, or remote. - Unlike gain contingencies, losses are reported immediately as long as they are probable and reasonably estimated. - Probable is defined as more than 50% likely to occur due to a past obligation.
METHODS FOR ACCOUNTING ASSURANCE WARRANTY
1. Accrual Approach: The accrual approach has the soundest theoretical support because it properly matches cost with revenue. Following this approach, the estimated warranty cost is recorded as follows : Warranty expense xx Estimated Warranty Liability xx
When actual warranty cost is subsequently incurred and paid, the entry is: Estimated Warranty Liability xx Cash xx
Any difference between estimate and actual cost is a change in estimate and therefore treated currently or prospectively, if necessary.
If the actual cost exceeds the estimate, the difference is charged to warranty expense as follows : Warranty Expense xx Estimated warranty liability xx
If the actual cost is less than the estimate, the difference is an adjustment to warranty expense as follows : Estimated warranty liability xx Warranty Expense xx
ILLUSTRATION: (Adopted)
An entity sells 1,000 units of television sets at P9,000 each for cash. Each television set is under warranty for one year. The entity has estimated from past experience that warranty cost will probably average P500 per unit and only 60% of the units sold will be returned for repair. The entity incurs P180,000 for repairs during the year
JOURNAL ENTRIES: To record the sales : Cash 9,000, Sales 9,000,
To set up the estimated liability on the warranty : Warranty Expense 300, Estimated warranty liability 300,
Estimated sets to be returned (60% x 1000) 600 sets Multiply by estimated warranty cost per set 500 Estimated warranty cost 300,
2021 300,000 440,
Estimated Warranty Liability, 12/31/ 21 1,100,
Testing the accuracy of warranty liability
On December 31, 2021, the estimated warranty liability account may be analyzed based on 4% and 10% estimate to determine whether the actual warranty costs approximate the estimate
SALES MADE EVENLY:
To have an easier interpretation or understanding of sales accruing evenly during the year, it is fair to assume that half of the sales were made on January 1 and the other half on July 1. Thus, the first contract year under a 2-year warranty of the sales made on January 1, 20 20 will be within January 1, 2020 to December 31, 2020 and the second contract year will be within January 1, 20 21 to December 31, 2021 The first contract year under a 2- year warranty of the sales made on July 1, 20 20 will be within July 1, 20 20 to June 30, 20 21 and the second contract year will be within July 1, 20 21 to June 30, 20 22.
Computations :
If sales and warranty repairs are made evenly during the year, the warranty expense for 20 20 -2021 and the estimated warranty liability on December 31, 2021 are determined as follows :
Warranty Expense Related to 20 20 sales :
2020 First contract year of January 1, 20 20 sales (2,500,000 x 4%) 100, First contract year of July 1, 2020 sales (2,500,000 x 4% x 6/12) 50,
2021 First contract year of July 1, 2020 sales (2,500,000 x 4% x 6/12) 50, Second contract year of Jan 1, 20 20 sales (2,500,000 x 10%) 250, Second contract year of July 1, 20 21 sales (2,500,000 x 10% x 6/12) 125,
2022 Second year contract year of July 1, 2020 sales (2,500,000 x 10% x 6/12) 125, Total Warranty Expense for 20 20 700,
Warranty Expense -related to 2021 sales :
2021 First contract year of January 1, 20 21 sales 120, (3,000,000 x 4%) First contract year of July 1, 2021 sales (3,000,000 x 4% x 6/12) 60,
2022 First contract year of July 1, 2021 sales (3,000,000 x 5% x 6/12) 60, Second contract year of January 1, 20 21 sales (3,000,000 x 10%) 300,
Second contract year of July 1, 20 21 sales (3,000,000 x 10% x 6/12) 150,
2023 Second contract year of July 1, 20 21 sales (3,000,000 x 10% x 6/12) 150, Total Warranty Expense for 2021 840, The warranty costs after December 31, 2021 represent the estimated warranty liability on December 31, 2021.
2020 sales under warranty after December 31, 2021 Second contract year of July 1, 2020 sales 125,0 00 2021 sales under warranty after December 31, 2021: First contract year of July 1, 2021 sales 60, Second contract year of January 1, 2021 sales 30 0, Second contract year of July 1, 2021 sales 300, 000
Estimated warranty liability – Dec. 31, 2021 785, Estimated warranty liability per book 1 ,100, Decrease in warranty liability (315,000)
The decrease in warranty liability is an adjustment of the warranty expense of 2021 as follows :
Estimated warranty liability 315, Warranty Expense 315,
ADDITIONAL ILLUSTRATION (ADOPTED)
If Sierra Sports determines the cost of the soccer goal screws are $30, the labor requirement is one hour at a rate of $40 per hour, and there is no extra overhead applied, then the total estimated warranty repair cost would be $70 per goal: $30 + (1 hour × $40 per hour). Sierra Sports sold ten goals before it discovered the rusty screw issue. The company believes that only six of those goals will have their warranties honored, based on past experience. This means Sierra will incur a warranty liability of $420 ($70 × 6 goals). The $420 is considered probable and estimable and is recorded in Warranty Liability and Warranty Expense accounts during the period of discovery (current period).
An example of determining a warranty liability based on a percentage of sales follows. The sales price per soccer goal is $1,200, and Sierra Sports believes 10% of sales will result in honored warranties. The company would record this warranty liability of $120 ($1,200 × 10%) to Warranty Liability and Warranty Expense accounts.
Figure 12 Sierra Sports’ Income Statement. Warranty Expense is recognized on the income statement. (attribution: Copyright Rice University, OpenStax, under CC BY- NC-SA 4 license)
Figure 12 Sierra Sports’ Balance Sheet. Warranty Liability is recognized on the balance sheet. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4 license)
2. Expense as incurred approach : The approach of expensing warranty cost only when actually incurred. This approach is justified on the basis of expediency when warranty cost is not very substantial or when the warranty period is relatively short.
APPLICATION
- Self-Check Activity
A google document will be shared to everyone under my IA classes to raise your questions and concerns about the topic. As such, clarification about answers to Self-Check Activity and Homework will be entertained thru this platform. I will answer your query as fast as possible. This document will stay active up until the duration of the course.
Answer the following cases and situations applying the applicable standards of accounting for liability. Answers are provided at the end of this activity.
Jamison Company uses IFRS for its financial reporting. It produces machines that sell globally. All sales are accompanied by a one-year warranty. At the end of the year, the company has the following data: - 2,500 units were sold during the year. - The trend over the past five years has been that 4% of the machines were defective in some way and had to be repaired. Of this 4%, half required a full replacement at a cost of P3,000 per unit and half were able to be repaired at an average cost of P300. What is the expected value of the warranty cost provision? P165,
Miley Equipment Company sells computers for P1,500 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2019, the
company sold 700 computers. Based on past experience, the company has estimated the total 2-year warranty costs as P30 for parts and P60 for labor. (Assume sales all occur at December 31, 2019.) In 2020, Miley incurred actual warranty costs relative to 2019 computer sales of P10,000 for parts and P18,000 for labor. (a) Under an assurance-type warranty, prepare the entries to reflect the above transactions (accrual method) for 2019 and 2020. (b) The transactions of part (a) create what balance under current liabilities in the 2019 statement of financial position?
(a) 2019 Accounts Receivable ......................................................................... 1,050, Sales Revenue ....................................................................... 1,050,
Warranty Expense ............................................................................. 63, Warranty Liability ................................................................... 63,
2020 Warranty Liability ............................................................................... 28, Inventory ................................................................................ 10, Accrued Payroll ...................................................................... 18,
(b) 2019 Current Liabilities—Warranty Liability P31,500. (The remainder of the P63,000 liability is a non-current liability.)
- Washburn provides a warranty with all its products it sells. It estimates that it will sell 1,200,000 units of its product for the year ended December 31, 20 20 , and that its total revenue for the product will be P100,000,000. It also estimates that 60% of the product will have no defects, 30% will have major defects, and 10% will have minor defects. The cost of a minor defect is estimated to be P5 for each product repaired, and the cost for a major defect cost is P15. The company also estimates that the minimum amount of warranty expense will be P2,500,000 and the maximum will be P12,000,000. Prepare the journal entry to record provisions, if any, for Washburn at December 31, 20 20
Warranty Expense* ............................................................................ 6,000, Warranty Liability ............................................................. 6,000,
*Expected warranty costs % Units Cost per Total Costs Unit No defects 60% 720,000 P 0 P 0 Major defects 30% 360,000 15 5,400, Minor defects 10% 120,000 5 600, Total 100% 1,200,000 6,000,
- During 2019, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to peso sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2019 and 2020 are as follows: Actual Warranty Sales Expenditures 2019 P 800,000 P12, 2020 1,000,000 30, P1,800,000 P42, At December 31, 2020, Eaton should report an estimated warranty liability of P66,000.
Expected value approach
incur $25,000 of warranty expense during the first three years of the car’s life and provide repairs evenly during the last extra two-year warranty period. How should Vendor A recognize revenue from this contract?
The five-year warranty is likely to contain both assurance- and service-type warranties. The first three years of the warranty is an assurance-type warranty because it is required by law. No revenue is allocated to this warranty. The two-year additional warranty should be classified as a service-type warranty because it is an additional service that Vendor A provides. Vendor A should allocate $20,000 of the transaction price to the extended warranty. It should recognize revenue ratably over the two-year warranty period because, on average, repair service is provided evenly over the two-year period for all customers. Vendor A would make the following entry on January 1, 20X1: January 1, 20X Cash $200, Warranty Expense (Assurance-type warranty) $25, Accrued Warranty Liability (Assurance-type warranty) $25, Un-earned Warranty Revenue (Service-type warranty) $20, Sales Revenue $180, The revenue for the service-type warranty would be recognized evenly in years 20X4 and 20X5.
2. Homework (Do-It-Yourself at your own pace)
Answer the following cases and situations applying the applicable standards of accounting for liability. Answers are provided on or before the next module is released.
A google document will be shared to everyone under my IA classes to raise your questions and concerns about the topic. I will answer your query as fast as possible. This document will stay active up until the duration of the course.
Part I: Concepts and Theory
Assume that a manufacturing corporation has (1) good quality control, (2) a one-year operating cycle, (3) a relatively stable pattern of annual sales, and (4) a continuing policy of guaranteeing new products against defects for three years that has resulted in material but rather stable warranty repair and replacement costs. Any liability for the warranty a. should be reported as non-current. b. should be reported as current. c. should be reported as part current and part non-current. d. need not be disclosed.
Information available prior to the issuance of the financial statements indicates that it is probable that, at the date of the financial statements, a company has a present obligation related to product warranties. The amount of the expense involved can be reasonably estimated. Based on the above facts, the estimated warranty expense should be a. accrued. b. disclosed but not accrued. c. neither accrued nor disclosed. d. classified as an appropriation of retained earnings.
Accounting for product warranty costs under an assurance-type warranty a. is required for income tax purposes.
b. is frequently justified on the basis of expediency when warranty costs are immaterial. c. charges an expense account when the seller performs in compliance with the warranty. d. represents accepted practice and should be used whenever the warranty is an integral and inseparable part of the sale.
Which of the following best describes the accounting for assurance-type warranty costs? a. Expensed when paid. b. Expensed when warranty claims are certain. c. Expensed based on estimate in year of sale. d. Expensed when incurred.
In a service-type warranty, warranty revenue is a. recognized in the year of sale. b. not recognized. c. recognized only in the last year of the warranty period. d. recognized equally over the warranty period.
Which of the following is a characteristic of an assurance-type warranty, but not a service-type warranty? a. Warranty liability. b. Warranty expense. c. Unearned warranty revenue. d. Warranty revenue.
Part II: Application and Problem Solving Below are series of hypothetical cases, adapted or self-made. Provide the requirement/s from each case. Answers are provided at the end of this activity.
During 2020, Stabler Co. introduced a new line of machines that carry a three-year warranty against manufacturer’s defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales Actual Warranty Expenditures 2019 P 400,000 P 6, 2020 1,000,000 30, 2021 1,400,000 90, P2,800,000 P126, What amount should Stabler report as a liability at December 31, 2021?
Warranty4U provides extended service contracts on electronic equipment sold through major retailers. The standard contract is for three years. During the current year, Warranty4U provided 21,000 such warranty contracts at an average price of P81 each. Related to these contracts, the company spent P200, servicing the contracts during the current year and expects to spend P1,050,000 more in the future. What is the net profit that the company will recognize in the current year related to these contracts?
Electronics4U manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is P200 per unit sold and reported a liability for estimated warranty costs P6 million at the beginning of this year. If during the current year, the company sold 50,000 units for a total of P243 million and paid warranty claims of P7,500,000 on current and prior year sales, what amount of liability would the company report on its statement of financial position at the end of the current year?
For example, the company ABC sold 1,000 washing machines with an average price of P400 each in 2020. The selling price includes one-year warranty on parts. With the prior experiences and historical information, the company expects 5% of products sold to be defective and the average repaired cost for the products will be P60 per unit. Also, the company honored warranty contracts on 45 products at the total cost of P2, during 2020. a. How much is the warranty provision by the end of 2 020?
Scheduled Online Quiz Through Moodle Platform
References:
IFRS15 Revenue from Contracts with Customers IAS 37 Provisions, Contingent Liabilities and Contingent Assets officialgazette.gov/1992/04/13/republic-act-no-7394-s-1992/ businessinsider/personal-finance/how- to-understand-warranties-2013- investopedia/terms/w/warranty.asp ifrsbox/021-warranties-ifrs-15/ freshbooks/hub/accounting/provisions-accounting oer2go/mods/en- boundless.com/accounting/definition/probable/index#:~:text=Reporting%20Contingencies &text=Contingencies%20are%20reported%20as%20liabilities%20on%20the%20balance%20sheet%20and,du e%20to%20a%20past%20obligation. openstax/books/principles-financial-accounting/pages/12-3-define-and-apply-accounting-treatment- for-contingent-liabilities
Chapter-III-Warranty-Liability-Module 86c360988 a054efe5143d15039 e0ecb6
Course: BS Accountancy (BAACC1)
University: Mindanao State University
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