After sale services as a part of production cost

if a mobile manufacturing company also provide 3 year after sale service I.e software update so does it is included in cost of production as provision for after sale services
Replies (4)
Quick Summary
This discussion explores whether the cost of providing after-sales services, such as three years of software updates for mobile phones, should be considered a production cost. The consensus is that these are not production costs but rather business expenses. Companies incur these costs and debit them to the profit and loss account, often by creating a provision for warranty expenses based on historical data.

It's not a production cost ............ but companies provide service without taking any fees........ then it will be their expenses whatever they incurred ................ 

Mean it is debited to p&l a/c

YES..... ... ..... 

Dr. Warranty expense 

Cr. Warranty liability

This amount is derived based on past expectations.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 16 July 2026
Article Assistant

Sahil Agarwal & Company

Mumbai

CA Inter

View Details
Company
23 July 2026
Senior Accountant

Felicity Adobe LLP

Bengaluru

CA Inter

View Details
Company
20 July 2026
Senior GST Executive

Chandak Agarwal & Co

Mumbai

Graduate (Any)

View Details
Company
21 July 2026
Chartered Accountant

Keshri & Associates

Thiruvananthapuram

CA

View Details
Company
ARTICLESHIP 16 July 2026
CA Article

Pipara & Co. LLP.

Mumbai

CA Inter

View Details
Company
16 July 2026
Manager - Finance & Accounts

Aliens Group

Hyderabad

CA Final

View Details
Company
06 July 2026
Accountant

Agarwal Anoop and Associates

Noida

CA Final

View Details
Company
29 July 2026
ACCOUNTANT

ONESTEP GST SOLUTION

New Delhi

B.Com

View Details
Follow