Tag Archives: warranty expense

How should AmTrust have accounted for the sales of its extended warranty plans to avoid restating three years of financial statements?

July 25, 2017 by Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA 0 Comments

AmTrust Financial Services, Inc., (NASDAQ: AFSI) is a multinational property and casualty insurance company headquartered in New York.  In 2017, the company had to restate three years of financial statements due to several accounting errors, the key one being how it accounted for extended warranties. AmTrust provides extended-service plans (ESP) for automobiles and other consumer […]

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Ch 09 Long-term liabilities, Financial accounting
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How would Apple’s financial statements be impacted by its iPhone one-year warranty and related iPhone 6s battery replacement program?

February 9, 2017 by Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA 0 Comments

Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are discovered in one year from the date of retail purchase, Apple will repair or replace the iPhone at no cost to the customer. Recently, a batch of iPhone 6s devices was discovered to have a defect that causes them […]

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Ch 03 Accrual income, Ch 09 Long-term liabilities, Financial accounting
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