b

Bilal Perabot provides a 2-year assurance warranty that the products sold (1.e. leather sofas) will not fail. In the event of any problems, the company will repair the item free of charge, and in the event the item cannot be repaired, a new item as replacement will be given free. In addition, the company has an additional policy for the buyers of its items called a service warranty, and which costs an additional RM3,000, for an additional 5-year warranty after the 2-year assurance warranty expires. How should the 2-year assurance warranty be accounted for under MFRS 15? What about the 5-year additional warranty, how should they be recognised in the financial statements? Select one: O a. The assurance warranty and the service warranty are required to be treated as two performance obligation as it is capable of being termed as distinct" under MFRS 15.27 Ob The assurance warranty and the service warranty are required to be treated as one performance obligation as it is not capable of being termed as "distinct" under MFRS 15.27. Oc. None of the answers O d. The assurance warranty are required to be treated as one performance obligation. The service warranty is treated as a distinct and separate performance obligation and accounted for as revenue over the 5 years after the first 2 years) after deducting any cost of the warranty expenses, if any