Addressing Warranties When Implementing The New Revenue Recognition Standards August 15, 2019 By: Claudia R. WolterA warranty is a separate performance obligation if the warranty can be purchased separately.What implementation issues surround accounting for warranties? Here are a few questions to ask yourself to determine how to minimize matters for this area of implementation:Who in the organization will evaluate the contracts to determine what warranties need to be separate individual performance obligations?Who will assign a transaction price to the warranty?What method will be used to calculate a transaction price for the warranty?What system changes need to be made in order to comply with accounting for a warranty as a separate performance obligation?Do any changes need to be made in internal controls to properly account for warranties?KatzAbosch has individuals experienced in contractor issues and trained in process improvement using lean six sigma principles that can help you through this transition. If you have any questions about this information please contact your KatzAbosch representative; or contact us by clicking here. Article by: Claudia R. Wolter, CPA, CCIFP, CCAClaudia Wolter, a Shareholder with KatzAbosch, joined the firm in 1988. She has played a major role in leading the firm into the 21st century with cutting edge initiatives, including the transition to and managing of a paperless environment. She serves as a leader within the firm’s Accounting and Auditing Services Group, assists in the quality control management and oversight of the firm and is a member of the Construction and Real Estate Services Group. A dedicated professional, Claudia holds the prestigious distinction of Certified Construction Industry Financial Professional (CCIFP), a certification held by less than 50 professionals in Maryland and less than 1000 professionals in the United States, the designation of Certified Construction Auditor (CCA) from the National Association of Construction Auditors (NACA) and a Lean Six Sigma CPA Green Belt certification from Ohio State University ATI and Boomer Consulting, Inc.
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