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What is the key aspect of revenue recognition for situation

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Reference no: EM132959131

Davis Corporation has always recorded revenue at the point of sale of its refrigerators. Recently, it has extended its warranties to cover all repairs for a period of seven years. One young accountant with the company now questions whether Davis has completed its earning process when it sells the refrigerators. She suggests that the warranty obligation for seven years means that a significant amount of additional work must be performed in the future.
Please answer the following questions:

Problem 1: What's the key aspect of revenue recognition for this situation?

Problem 2: At what point should revenue be recognized?

Reference no: EM132959131

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