Methodological Aspects of Accounting of Warranty Provision in Accordance With International Financial Reporting Standards

: сс. 22 - 32
National Technical University «Kharkiv Polytechnic Institute», Ukraine
Mykolayiv national agrarian university, Ukraine
Mykolayiv national agrarian university, Ukraine
National Technical University «Kharkiv Polytechnic Institute», Ukraine

In order to ensure that warranty repair and maintenance costs are included evenly in accordance with National Accounting Standards and International Financial Reporting Standards, entities are entitled to create provisions under warranty. Creation of such provisions allows to adjust the income and expenses for warranty repair and maintenance and to reasonably distribute expenses between the reporting periods, which helps to optimize the tax burden. The purpose of the article is to review the methodological aspects of accounting of warranty provisions in accordance with International Financial Reporting Standards. The achievement of the stated goal necessitated the following tasks: to disclose the nature and conditions of recognition of provisions for warranty in accordance with international accounting standards; to present the methodology for accounting in the accounting and tax accounting and financial statements of the provision for warranty in accordance with IFRS; to propose methods of calculating the warranty provisions to determine their main advantages and disadvantages. The main general scientific methods of research were the analysis (for conducting the research of the main essential characteristics of the research object and peculiarities of its functioning in the context of the topic of scientific work). Analogy method, dialectical method and systematic approach were used to reflect the methodological approach to accounting and to show in the financial statements the provisions for warranty. Comparison method was used for evaluating the techniques for calculating warranty provision for entities that prepare IFRS financial statements.

  1. Voskalo, N. M., Karyy, O. I., & Voskalo, V. I. (2017). Features of accounting and reporting in the reporting of information on provision in accordance with national and international standards, as well as the tax code of Ukraine. In Visnyk Natsional’noho universytetu “L’vivs’ka politekhnika”. Seriya “Menedzhment ta pidpryyemnytstvo v Ukrayini: etapy stanovlennya i problemy rozvytku” [Bulletin of National University “Lviv Polytechnic”. Series “Management and entrepreneurship in Ukraine: stages of formation and development problems”], 862, 55-60. [in Ukrainian].
  2. Demyanenko, S. S. (2015). Peculiarities of accounting of securities in accordance with national standards and international accounting and reporting standards. Hlobal’ni ta natsional’ni problemy ekonomiky — Global and national economic problems, 5, 984-988. [in Ukrainian].
  3. Dzyuba, N. (2015). Guarantee service: we account for a new one. In Podatky ta bukhhalters’kyy oblik [Taxes and Accounting], 34, 28-33. Retrieved from e-34/article-7586.html [in Ukrainian].
  4. Zatoka, T. Y. (2011). Disclosure on ways to ensure compliance with reporting obligations: areas for improvement. Mizhnarodnyj zbirnyk naukovykh prats’, 2(20), 212-220 [in Ukrainian].
  5. Panchenko, O. M., & Cherevko, A. B. (2016). Improvement of the accounting of provisions and reserves of the enterprise in the conditions of reforming the national economy of Ukraine. Stalyy rozvytok ekonomiky — Sustainable development of the economy, 3, 163-170 [in Ukrainian].
  6. Sviridenko, A. (2017). Warranty obligations of manufacturers (sellers). In Podatky ta bukhhalters’kyy oblik [Taxes and Accounting]: 80. Retrieved from ssue-80/article-30951.html [in Ukrainian].
  7. Slyvka, Y. V. (2012). Social Responsibility for Product Sales: An Accounting Aspect. Visnyk ZhDTU. 1 (59). 198-203 [in Ukrainian].
  8. Chyzhevs’ka, L. V. (2018). Accounting for guarantees in the context of International Financial Reporting Standards. Sotsial’no-ekonomichni problemy suchasnoho periodu Ukrainy. 6 (134). 139-143. [in Ukrainian].
  9. Provisions, Contingent Liabilities and Contingent Assets : International Accounting Standard 37. Retrieved from file:///C:/Users/Bosik/Desktop/ viewPdf.pdf.
  10. Yehorova, I. Warranty reserve: who should create and what benefits. Retrieved from ua/publication/commerce-12-sxemy-buxgalterskix- provodok-30-rezerv-na-vypolnenie-garantijnyx- obyazatelstv-kto-dolzhen-sozdavat-i-v-chem- vygoda.
  11. Revenue from Contracts with Customers: International Financial Reporting Standard (IFRS) 15. Retrieved from ifrs/ifrs-15.html.
  12. Vojtenko, T. (2019). Accounting for guarantees under IFRS 15. Podatky ta bukhhalters’kyj oblik. 91. Retrieved from nibu/2019/november/issue-91/article-105341.html.
  13. Verkhovna Rada of Ukraine (2010). Tax Code of Ukraine (Order No. 2755-VI, December 2). Retrieved from nsf/link1/T102755.html [in Ukrainian].
  14. Radonov, O. Provisions under IFRS Accounting:6 Methods of Calculation. Retrieved from ua/publication/commerce-12-msfo- 28-obespechenie-pod-garantijnye-obyazatelstva-v- msfo-uchete-6-metodov-rascheta.