IAS37 warranty provision

[fahad2119]

subjectF7(ACCA)
topicias37 warranty provision

ques a detailed information is given about a shoopkeeper business includes faulty returns past assumption, markup of 40% etc

the requirement is to cal. the amount of provision and in the solution the amount of profit is considered as a provision that should be made
my question is y the author didnt consider faulty returns ???
secondly can a profit be recognize as a provision ????


thank u

[Choohan]

The scenario of the question is unclear. To give an opinion one should know the scenario completely.
So it is advised that you should write the complete scenario.