What Will be the journal entry if sales warranty provision made in current year and next year under AS 29.
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As 29 ipcc
Replies (4)
p&l ac. dr.
to prov for warranty
to prov for warranty
When u make a provision - Warranty expense..dr -- To Warranty liability
When customer claims warranty - Warranty liability...dr -- To inventory/ cash
Value will be the cost of goods under warranty sold....major difference in indas and as in case of warranty accounting is discounting....indas allows discounting of future probable cash flow due to warranty claim
the above specified entry is to be recorded as on 31 St March for unexpired warranty
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