What type of warranty is suzuki providing to customers

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Question - Suzuki Group Presented below is the current liabilities section and related note of Suzuki Group.

 

(yen in millions)

 

Current Year

Prior Year

Current liabilities

 

 

Current portion of long-term debt

¥15,000

 ¥10,000

Short-term debt

2,668

405

Accounts payable

29,495

42,427

Accrued warranty

16,843

16,741

Accrued marketing programs

17,512

16,585

Other accrued liabilities

35,653

33,290

Accrued and deferred income taxes

16,206

17,348

Total current liabilities

¥133,377

¥136,796

Notes to Consolidated Financial Statements - Note 1 (in part): Summary of Significant Accounting Policies and Related Data.

Accrued Warranty - The company provides an accrual for future warranty costs based upon the relationship of prior years' sales to actual warranty costs.

The company provides an accrual for future warranty costs based upon the relationship of prior years' sales to actual warranty costs.

Required - Answer the following questions:

a. What type of warranty is Suzuki providing to customers?

b. Under what circumstance, if any, would it be appropriate for Suzuki to recognize unearned revenue on warranty contracts?

c. If Suzuki recognized unearned revenue on warranty contracts, how would it recognize this revenue in subsequent periods?

Reference no: EM133073780

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