Provisions for warranties may only be reported in the liabilities section of a statement of financial position as current liabilities.

Question

Quizplus · Accepted Answer

Provisions for warranties can be reported as either current or non-current liabilities in the statement of financial position, depending on when the obligation is expected to be settled. If it is expected to be settled within one year, it is classified as a current liability; if it is expected to be settled after more than one year, it is classified as a non-current liability.

Provisions for Warranties May Only Be Reported in the Liabilities