Should a provision be recognised in the financial statements for the
year ended 31 December 20X6 for goods sold before the year-end
which may be returned during 20X7?
Solution to Illustration 2
The policy is well known and creates a valid expectation that the store will
give refunds to customers who return goods. At the year-end date, there
is a constructive obligation. It is probable some refunds will be made.
The obligation can be reliably measured, perhaps by using expected
values based upon past experience of what proportion or value of goods
sold are actually returned by customers.
Conclusion:
A provision is required and a reliable estimate of the
amount should be made for inclusion in the financial statements.
Do'stlaringiz bilan baham: |