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IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IAS 37 Provisions, Contingent Liabilities and Contingent Assets

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by obedevert.
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  • April 4, 2017 at 1:41 pm #380080
    obedevert
    • Topics: 1
    • Replies: 1
    • ☆

    Dear Sir,

    Please can you tell me if warranty provisions are over-stated in one accounting period why is the profit overstated in subsequent periods?

    Thank you

    Obed

    April 19, 2017 at 8:10 pm #382712
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6301
    • ☆☆☆☆☆

    Hi,

    This is because the over stated warranty provision is then released in the next accounting period, thus overstating the next periods accounting profit

    Thanks

    April 20, 2017 at 6:32 am #382766
    obedevert
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you so much. I really appreciate your taking time to reply. I would never have this cleared without your help.

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