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Financial Accounting II Lecture 32

Financial Accounting II Lecture 32

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Published by Mohsin

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Categories:Business/Law
Published by: Mohsin on Nov 23, 2009
Copyright:Attribution Non-commercial

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07/08/2010

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Financial Accounting IILecture 32
 
A manufacturer gives warranties at the time of sale to the purchaser of its products. Under theterms of the contract for sale the manufacturer undertakes to make good, by repair or replacement, manufacturing defects thatbecome apparent within three years from thedate of sale. On past experience, it is probable(i.e. more probable than not) that there will besome claims under the warranties.
Warranties – IAS 37
 
Present obligation as a result of past obligating event
– theobligating event is the sale of theproduct with warranty, which givesrise to a legal obligation.
An outflow of resourcesembodying economic benefits insettlement– probable for thewarranties as a whole.
Warranties – IAS 37

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