Managerial accounting is more than recording, maintaining, and reporting financial results. Managerial accountants must provide managers with both financial and nonfinancial information including estimates, projections, and forecasts. An important estimate for Polaris is its reserve for warranty claims, and the company must provide shareholders information on these estimates.
Required
1. Access and read Polaris's "Product warranties" section of the "Organization and Significant Accounting Policies" footnote to its financial statements, from Appendix A. What is the warranty period for Polaris's products? How does management establish and adjust the warranty reserve? What are some of the effects if the company's actual results differ from its estimates?
2. What is the management accountant's role in determining those estimates?
3. What are some factors that could impact the warranty accrual in a given year?
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