Refined China accounting treatment for assurance warranty
In brief
- China has lately issued a new accounting guideline, i.e. CAS Interpretation No. 18, to clarify the accounting treatment for assurance-type product sales warranty, which refer to warranty services for meeting the statutory product quality requirements – representing another important step in China’s ongoing convergence with International Financial Reporting Standards (IFRS).
- The interpretation is particularly relevant for sales of durable goods, machinery and equipment, consumer electronics, automobiles, etc. This article explores the requirements and implications.