(b) (i) Discusses the principles involved in accounting for claims made under the above wa

(b) (i) Discusses the principles involved in accounting for claims made under the above warranty provision.

(6 marks)

(ii) Shows the accounting treatment for the above warranty provision under IAS37 ‘Provisions, Contingent

Liabilities and Contingent Assets’ for the year ended 31 October 2007. (3 marks)

Appropriateness of the format and presentation of the report and communication of advice. (2 marks)

(b) Provisions – IAS37An entity must recognise a provision under IAS37 if, and only if:(a) a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event)(b) it is probable (‘more likely than not’), that an outfl