I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART F: PREPARING BASIC FINANCIAL STATEMENTS 

 

358

 

2 

An indication of the uncertainties about the amount or timing of those outflows and, 

where necessary to provide adequate information, the major assumptions made 

concerning future events.  

3 

The amount of any expected reimbursement relating to the provision and whether 

any asset has been recognised for that expected reimbursement. 

 

(IAS 37, paras. 84–85) 

Example: disclosure in the financial statements 

Below is an example of how a warranty provision might be disclosed in the notes to the financial 

statements. 

Note X: Provisions 

 

 

Warranty 

provision 

  

 

$'000 

At 1 April 20X6 

 

 150 

Increase in the provision during the year 

 

 60 

Amounts used during the year 

 

   (75) 

At 31 March 20X7 

 

   135 

The warranty provision relates to estimated claims on those products sold in the year ended  

31 March 20X7 which come with a three year warranty. The expected value method is used to 

provide a best estimate. It is expected that the expenditure will be incurred in the next three years.