[sanju84]

Need insights on this situation.

Supplier provided FA for x amount and there were lot of issues with the asset so after a year they issued a credit note of $40k to be used against future asset repair. What should be the treatment? I think it should be treated as deferred expense while another accountant thinks it can be treated as warranty and not accounted in books

FAR - 90 - 4/2013
AUD - 95 - 5/2013
BEC - 89 - 7/2013
REG 79 - 8/2013

[mla1169]

I agree with the other accountant who thinks it should be treated as a warranty and not put on the books. You most likely can't reasonably estimate when the repairs will be necessary so I see no reason it should be reflected in your financials.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[mla1169]

I agree with the other accountant who thinks it should be treated as a warranty and not put on the books. You most likely can't reasonably estimate when the repairs will be necessary so I see no reason it should be reflected in your financials.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Author]

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