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Công ty M là nhà sản xuất và bán xe ôtô, có bảo hành sản phẩm trong vòng 3 năm. Công ty M cam kết sẽ sửa chữa mọi hư như sau:
Mức độ hỏng nhỏ Mức độ hỏng lớn
Chi phí sửa chữa 3% doanh thu 15% doanh thu
Tỷ lệ hỏng sau 1 năm Tỷ lệ hỏng sau 2 năm 30% 40% 10% 10%
Tính đến cuối năm x0, doanh thu bán xe ô tô của công ty M là $1,000,000. Biết lãi suất chiết khấu là 10%/ năm. Năm tài chí Yêu cầu: Tính toán và trình bày bút toán trích lập dự phòng vào cuối năm x0. (1 điểm) Vào năm x1, Công ty M đã phát sinh chi phí bảo hành cho các xe ô tô hỏng là $20,000. Do những thay đổi công nghệ trong c tính lại tỷ lệ hỏng của năm thứ 3 sau khi bán hàng là: tỉ lệ hỏng nhỏ là 30% và tỉ lệ hỏng lớn là 10%. Tính toán lại chi phí cần lập dự phòng cho doanh thu năm x0 tại thời điểm năm năm x1. Biết rằng lãi suất chiết khấu không Theo số liệu doanh thu năm x0, hoàn chỉnh bảng tính toán bên dưới và trình bày các bút toán lập dự phòng trong năm x1. (
Năm X0 X1
1. Assessment of provision
Present obligation as a result of past event? Outflow of economic benefits probable? Reliable estimate?
2. Measurement of provision (31/12/X0) X0 Doanh thu CP sửa chữa nhỏ Chi phí sửa chữa lớn Ước tính chi phí sửa chũa 3 năm bảo hành NPV(10%)(ngày 31/12/X0)
Debit P/L - Expense for warranty repairs Credit Short-term liabilities - provision Credit Long-term liabilities - provision 3. Measurement of provision (31/12/X1)
X1
X2
-
Ước tính chi phí sửa chữa X2&X3 NPV(10%)(ngày 31/12/X1)
Debit - Short-term liabilities - provision Credit - Cash Credit- P/L (Expense for warranty repairs- gain)
Năm X0 X1
Số lập dự phòng ngày 1/1 Chi phí bảo hành (P/L)
0 0
0
0
Debit - Long-term liabilities - provision Credit - Short- liabilities - provi Credit- P/L (Expense for warran
Chi phí sửa chữa thực tế
Bút toán X1
In the year 20X2, CarProd makes warranty repairs on products sold in 20X1 for total cost of 8,82 mil. EUR. Show the appropriate accounting treatment.
Debit P/L - Finance cost (3%*77,61) Credit Liabilities - provision
Debit Liabilities - provision Debit P/L - expenses for warranty repairs (8,82-8,6) Credit Cash, payables...
am kết sẽ sửa chữa mọi hư hỏng miễn phí trong vòng 3 năm đầu sau khi bán. Theo số liệu thống kê
Tỷ lệ hỏng sau 3 năm 60% 20%
là 10%/ năm. Năm tài chính kết thúc ngày 31/12.
hay đổi công nghệ trong các năm gần đây, ô tô ít hỏng hơn so với quá khứ. Vì vậy, Công ty M ước %. lãi suất chiết khấu không thay đổi. (1 điểm) dự phòng trong năm x1. (1,5 điểm)
X3
0
erm liabilities - provision t - Short- liabilities - provision t- P/L (Expense for warranty repairs- gain)
Số lập dự phòng ngày 31/12
chi phi TC -
mil. EUR.
0 -
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Example 1: Provisions in various situations
IAS 37: Provisions
1. Warranties CarProd is a car manufacturer who gives warranties to its clients at the time of purchase. Under the terms of sale contract, CarProd undertakes to repair manufacturing defects or replace defective parts that become apparent within 5 years from the date of sale. Based on previous experience, it is probable that there will be some claims under warranties. Should CarProd recognize any provision?
Present obligation as a result of past event?
Assessment Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
2. Contaminated land A. Legislation to be enacted PhthalateCorp operating in chemical industry worldwide regularly causes contamination of land , but cleans up only when is required so under the laws of particular country. Country Cleanlandia has had no such legislation and PhthalateCorp has been contaminating land for several years. As at 31 December 20X1 it is certain that draft of law requiring clean-up of contaminated land (no matter when) will be enacted after the year-end in Cleanlandia. Should PhthalateCorp recognize any provision?
Present obligation as a result of past event?
Assessment Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
2. Contaminated land B. Constructive obligation BenzCorp operating in chemical industry worldwide regularly causes contamination of land , but has widely published its environmental policy in which it undertakes to clean up all contamination. Benz Corp operates also in the countries without any environmental legislation. Should BenzCorp recognize any provision for clean-up of land also in countries without applicable laws?
Present obligation as a result of past event?
Assessment Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
3. Refunds policy Tracy's Co, home appliances retailer, has a generally known policy of refunding purchases by unhappy customers even though it is not required by law. Should Tracy's recognize any provisions for refunds?
Present obligation as a result of past event?
Assessment Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
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Example 1: Provisions in various situations
IAS 37: Provisions
4. Legal requirement to fit smoke filters Under new legislation, PaperCo is required to fit smoke filters to its factories by 31 March 20X2. Paper Co has not fitted smoke filters yet. Should PaperCo recognize any provision as at 31 December 20X1 and 20X2?
Present obligation as a result of past event?
31-Dec-20X1 No
31-Dec-20X2 No
Nothing
Nothing
Outflow of economic benefits probable? Reliable estimate?
5. Repairs and maintenance SkyBeings, an airline, needs to replace seats in its aircraft every 5 years. At the end of 20X1, the seats have been in use for 3 years. Also, SkyBeings is required by law to overhaul its aircraft once every 3 years. Should SkyBeings recognize provision for replacement of seats or overhauling as at 31 December 20X1?
Present obligation as a result of past event?
Seats No
Overhauling Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Nothing
Provision
6. Staff retraining Government introduces a number of changes to the income tax system. As a result of these changes, Taxexperts Co will need to retrain a large number of its financial services staff in order to continue providing up-to-date information and advices to its clients. Should Taxexperts recognize provision for retraining?
Present obligation as a result of past event?
Assessment No
Outflow of economic benefits probable? Reliable estimate?
Nothing
7
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Example 2: Contingent liabilities and contingent assets
IAS 37: Provisions
HamburgerPrince, fast food company, organized birthday party for 20 children where burgers from minced beef meat were served. After the party, 8 children came to hospital suffering from food poisoning and their parents believe that it is due to burgers not fried properly. Parents are now suing HamburgerPrince. Lawyer of this company believes that based on past similar court cases and insufficient evidence against HamburgerPrince there is 40% chance of losing the case and HamburgerPrice would have to pay 160 000 EUR to indemnify children for poisoning. What should HamburgerPrince do in its financial statements in relation to this claim?
Present obligation as a result of past event? Outflow of economic benefits probable?
Assessment Yes No
Reliable estimate?
Contigent Liability
A few months later, court case proceeded further where one employee of HamburgerPrince , acting as a witness, stated that frozen beef burgers supplied by local meat processing company Beefers showed signs of potential bacterial infection. Judge ordered immediate inspection in Beefers to verify its' hygienic and work standards. Inspection proved presence of several bacteria in half products. Court case against HamburgerPrince has not been closed yet. Based on this new evidence, lawyer believes that chance to lose the case increased to 80% . HamburgerPrince then decided to sue Beefers for supplying contaminated burgers and causing them damage. However, Beefers argue that if HamburgerPrince would have fried burgers properly, every possible infection would be destroyed. Lawyer believes that HamburgerPrince has 90% chance of winning this case with compensation of 160 000 EUR from Beefers. What should HamburgerPrince do in its financial statements in relation to new events?
1. HamburgerPrince vs. parents
Present obligation as a result of past event?
Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
2. HamburgerPrince vs. Beefers
Possible asset as a result of past event?
Yes
Inflow of economic benefits virtually certain?
Yes
Reliable estimate?
Yes
Asset
Example 3: Measurement of and accounting for provisions
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IAS 37: Provisions
CarProd ,car manufacturer, undertakes to repair manufacturing defects or replace defective parts that become apparent within 5 years from the date of sale. Past experience and future expectations indicate the following: 1. Repair costs depend on the extent of defects: 400 mil. EUR in case of minor defects and 700 mil. EUR in case of major defects (if all cars would have minor / major defects). 2. CarProd estimates 80% cars with no defects, 18% cars with minor defects and 2% cars with major defects were sold in the year 20X1. 3. 10% of all repairs is made in the 1st year after sale, 15% in the 2nd year, 20% in the 3rd year, 25% in the 4th year and 30% in the 5th year. These figures relate to both major and minor repairs. All cash flows happen at the end of year. 4. Pre-tax current market rate is 3% p.a. What should CarProd disclose in its financial statements as at 31 December 20X1?
1. Assessment of provision
Present obligation as a result of past event?
Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
2. Measurement of provision A Costs
Defects No defects Minor defects Major defects Total
B C=A*B Probability Expected value 80% 0 18% 72 2% 14 86
0 400 700
Year
Discount factor 1 2 3 4 5
Percentage of repairs
0.971 0.943 0.915 0.888 0.863
Total
Expected costs
10% 15% 20% 25% 30%
Present value(31/12/X1)
8.60 12.90 17.20 21.50 25.80 86.00
8.35 12.16 15.74 19.10 22.26 77.61
Present value(31/12/X2) 0.971 0.943 0.915 0.888
Formula used: 1/(1+0,03)^year
3. Accounting treatment Recognition of provision:
Debit P/L - Expense for warranty repairs: 77,61 Credit Short-term liabilities - provision: 8,35 Credit Long-term liabilities - provision: 69,26
77.61 mil. EUR 8.35 mil. EUR 69.26 mil. EUR
In the year 20X2, CarProd makes warranty repairs on products sold in 20X1 for total cost of 8,82 mil. EUR. Show the appropriate accounting treatment. Unwinding the discount:
Debit P/L - Finance cost (3%*77,61): 2,33 Credit Liabilities - provision: 2,33
2.33 mil. EUR 2.33 mil. EUR
Expenses for warranty repairs:
Debit Liabilities - provision: 8,6 Debit P/L - expenses for warranty repairs (8,82-8,6) Credit Cash, payables...: 8,82
8.60 mil. EUR 0.22 mil. EUR 8.82 mil. EUR
12.52 16.21 19.68 22.92 0.00
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Example 3: Measurement of and accounting for provisions
Balance of provision as at 31 December 20X2: (77,61+2,33-8,60)
71.34 mil. EUR
IAS 37: Provisions
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m the date of sale.
would have minor / major
. These figures relate to both
Example 3: Measurement of and accounting for provisions
IAS 37: Provisions
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Example 4: Future operating losses
IAS 37: Provisions
Swimmers Co. operates a set of water parks with leisure facilities for families in Aqualandia. Recent earthquake and world financial crisis caused that number of visitors in water parks dramatically dropped. Swimmers Co. estimates that the number of visitors will not increase back within the next 2 years and as a result, Swimmers will make loss of 3 mil. EUR each year. What should Swimmers Co. do in its financial statements in relation to this situation?
Present obligation as a result of past event?
Assessment No
Outflow of economic benefits probable? Reliable estimate?
No Provision => Test for impairment
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sed that number ears and as a
Example 4: Future operating losses
IAS 37: Provisions
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Example 5: Onerous contracts
IAS 37: Provisions
Except for water parks, Swimmers operate also 2 theme hotels in Aqualandia. Hotels are held under non-cancellable operating lease that expires in 3 years. Swimmers' managers estimate that due to overall decrease in number of visitors, hotels will make annual loss of 1 mil. EUR each year if continuing operations. Swimmers may also prematurely terminate the lease but with penalty of 2 mil. EUR. What should Swimmers Co. do in its financial statements in relation to this situation?
1. Assessment Present obligation as a result of past event?
Yes
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Provision
2. Measurement & accounting 2.1 Calculation of provision Penalty to exit contract Loss in case of completing contract (3*1 mil. EUR) Provision (lower)
2 mil. EUR 3 mil. EUR 2 mil. EUR
2.2 Accounting treatment Provision for onerous contract:
Debit P/L - Expenses for penalty - onerous contract Credit Liabilities - Provision
2 mil. EUR 2 mil. EUR
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Example 6: Restructuring
IAS 37: Provisions
NiceHome Co. runs 2 main divisions: production of wooden accessories and metal accessories. On 30 September 20X1, board of directors approved formal restructuring plan that involves shifting some production away from metal accessories to wooden accessories due to current developments of customers' preferences. Managers have prepared details of restructuring plan and have publicly announced it on 30 November 20X1. An implementation of the plan should start on 1 February 20X2 and complete 31 January 20X3. Managers have estimated the costs of restructuring as follows: 1. Carrying amount of redundant machines for metal accessories production - 2 000 000 EUR, revenue from their sale (based on offer received recently) - 1 300 000 EUR 2. New computers in accounting department - 50 000 EUR 3. Cost of retraining employees from metal accessories - 100 000 EUR 4. Cost of severance payments to redundant employees from metal accessories - 400 000 EUR What should NiceHome do in its financial statements in relation to this situation?
1. Assessment Present obligation as a result of past event?
30 Sep 20X1
30 Nov 20X1
1 Feb 20X2
No
Yes
already provided
Outflow of economic benefits probable?
Yes
Reliable estimate?
Yes
Nothing
Provision
2. Measurement & accounting 2.1 Calculation of provision Redundant machines - impairment (2 000 000 - 1 300 000)
700,000
Computers in accounting department Retraining of employees Severance payments Provision
50,000 100,000 400,000 550,000
2.2 Accounting treatment Impairment of machines
Debit P/L - Impairment of assets Credit Assets - machines
700,000 700,000
Provision
Debit P/L - Expenses for restructuring Credit Liabilities - provision
550,000 550,000
Example 7: Decommissioning provision
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IAS 37: Provisions
Clean Electric Co., electricity producer, has brought into commission new nuclear power plant on 1 January 20X1. Its cost is 800 mil. EUR (provision for decommissioning not included). Decommissioning experts have estimated that Clean Electric will have to spend 350 mil. EUR in total to remove the station and clean-up the area. Decommissioning will last for 10 years and schedule of expenditures is shown in table below. All figures do not include inflation and are expressed in 20X1 prices. External consultants advice that annual inflation is to be 3% p.a. in average and current market interest rate on long-term bonds is 2% p.a. What should Clean Electric Co. show in its financial statements in respect of decommissioning? (note - Clean Electric Co. applies cost model according to IAS 16).
1. Calculation of provision Year 20X21 20X22 20X23 20X24 20X25 20X26 20X27 20X28 20X29 20X30
Years from Expenditure Inflation factor Inflated cost 20X1 20 35.00 1.806 63.21 21 35.00 1.860 65.11 22 35.00 1.916 67.06 23 35.00 1.974 69.08 24 35.00 2.033 71.15 25 35.00 2.094 73.28 26 35.00 2.157 75.48 27 35.00 2.221 77.75 28 35.00 2.288 80.08 29 35.00 2.357 82.48 350.00
Formula used: (1+0,03)^(n. of years from 20X1)
Formula used: 1/(1+0,02)^(n. of years from 20X1)
2. Accounting treatment Initial recognition of decommissioning provision:
Debit Assets - nuclear powerplant Credit Liabilities - decommissioning provision
444.68 -444.68 0.00
Annual depreciation (as a part of cost of an asset)
Debit P/L - Depreciation (445,59/20) Credit Assets - Accumulated depreciation
22.23 -22.23 0.00
Unwinding the discount:
Debit P/L - Finance cost (2%*445,59) Credit Liabilities - decommissioning provision
Balance of capitalized provision for decommissioning assets as of 31 December 20X1 (445,59-22,28): Balance of provision for decommissioning liabilities as of 31 December 20X1 (445,59+8,91):
Discount Present factor value 0.673 42.54 0.660 42.96 0.647 43.38 0.634 43.80 0.622 44.23 0.610 44.67 0.598 45.11 0.586 45.55 0.574 45.99 0.563 46.45 444.68
8.89 -8.89 0.00 422.44
453.57
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rovision for move the not include interest rate on
l according to
Example 7: Decommissioning provision
IAS 37: Provisions
Example 8: Change in decommissioning provision (IFRIC 1)
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IAS 37: Provisions
At the end of 20X7, Clean Electric Co. received license to operate power plant for extended time until the end of 20X25. With respect to this change and due to new technologies available, experts adjusted their estimate of decommissioning expenses as shown in table below (in 20X7 prices). Inflation and discount rate remain unchanged. What should Clean Electric Co. show in its financial statements in respect of change in decommissioning provision?
1. Calculation of provision 1.1 Revised provision Year 20X26 20X27 20X28 20X29 20X30 20X31 20X32
Years from Expenditure Inflation factor Inflated cost 20X7 18 35.00 1.702 59.59 19 35.00 1.754 61.37 20 35.00 1.806 63.21 21 35.00 1.860 65.11 22 35.00 1.916 67.06 23 35.00 1.974 69.08 24 35.00 2.033 71.15
Formula used: (1+0,03)^(years from 20X7)
Discount Present factor value 0.700 41.72 0.686 42.13 0.673 42.54 0.660 42.96 0.647 43.38 0.634 43.80 0.622 44.23 300.76
Formula used: 1/(1+0,02)^(years from 20X7)
1.2 Original provision N. of years 20X1 - 20X7: Capitalized provision - assets (445,59-445,59/20*7) Provision - liabilities (445,59*1,02^7)
Note: In fact, you have to compare change in provision with total carrying amount of plant, not just capitalized costs - this is just simplification.
Change in provision (511,84 - 385,15)
2. Accounting treatment Change in decommissioning provision - under IFRIC 1 + cost model:
Debit Liabilities - decommissioning provision Credit Assets - nuclear powerplant
0.00 0.00 0.00
1 year later: Depreciation of powerplant - just capitalized decom costs shown:
Debit P/L - Depreciation ((289,63-126,70)/18) Credit Assets - Accumulated depreciation
0.00 0.00 0.00
1 year later: Unwinding the discount:
Debit P/L - Finance cost (2%*385,15) Credit Liabilities - decommissioning provision
6.02 -6.02 0.00