Wednesday, January 28, 2009

Warranty and Shop Loss

All accounting rule only define a standard for warranty and shop loss accruals. Accruals can be made when the probability is high and can estimate the dollar amount. But I feel the standard should define that business should have a process to close a warranty or shop loss claims. It should start from raising a claim to closing and finding corrective action. It also should define claims should be closed before the consideration is paid to customer.

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