Requirements for provision accounting

Assignment Help Accounting Basics

Reference no: EM131005063

Critically assess the following cases within the context of the IAS 37 requirements for provision accounting.

(a) Company A offers a one year warranty for the products that it manufactures. Yearly revenue subject to product warranties amounts to €3 000 000. In past years between 1 per cent and 3 per cent of the products proved defective. Defective products are replaced.

(b) Company B produces and sells phosphate fertilizers that are used to grow grains. The process of extracting the raw materials from the land the company owns, has a major impact on the natural environment. At balance sheet date, estimates of environmental remediation costs amount to €5 000 000.

(c) A law suit claiming damages has been filed against company C. The company foresees a reasonable possibility of losing the law suit. The company's legal advisers have estimated potential settlement costs at €350 000.

(d) Company D runs an airline. The company is required by law to overhaul its aircraft once every three years. The future maintenance costs are estimated at €2 500 000.

Reference no: EM131005063

Questions Cloud

Read full plot summary of the movie double jeopardy : Read a full plot summary of the movie Double Jeopardy. In a one- to two-page (250- to 500-word) paper, give your assessment as to whether the "double jeopardy" clause of the Fifth Amendment to the U.S. Constitution would protect the character Libby (..

Measure the return on investment for pso : Senior management will always ask what business value they will realize from the PSO. How would you measure the Return on Investment for your PSO? (Be careful-this is a trick question.)

How decided between the two approaches to find the best fit : select the qualitative approach that best fits the questions, and defend your selection. Include an explanation of which approach would be the next best choice for your research questions, and explain how you decided between the two approaches to ..

How might your solution differ if cook textiles : How might your solution differ if Cook Textiles prepares its financial statements according to International Financial Reporting Standards?

Requirements for provision accounting : Critically assess the following cases within the context of the IAS 37 requirements for provision accounting.

Prepare a depreciation schedule : Prepare a depreciation schedule (i.e. for the six year period) for each depreciation method, showing asset cost, depreciation expense, and asset book value.

Describe the capability maturity mode : Describe the Capability Maturity Mode. At what level is it appropriate to introduce CASE environments and why ?

What amount does fedex report in its balance sheet : What amount does FedEx report in its balance sheet for its pension and other postretirement benefit plans? Explain.

Write negative binary numbers in sign and magnitude : The first part of this unit introduces the material to be studied later. In addition to getting an overview of the material in the first part of the course, you should be able to explain the difference between analog and digital systems and why dig..

User Account

All Pages