Q3: A manufacturer gives warranties to the purchasers of its goods. Under the terms of the warranty the manufacturer undertakes to make good, by repair or replacement, manufacturing defects that become apparent within three years from the date of sale to the purchasers. Explain accounting treatment Under IAS37 for a) On 31 January 20X1 a manufacturing defect was detected in the goods manufactured by the entity between 1 December 20X0 and 31 January 20X1. b) At 31 December 20X0 (the entity's reporting date) the entity held about one week's sales in inventories. C) The entity's financial statements for the year ended 31 December 20X0 have not yet been finalized. Q3: A manufacturer gives warranties to the purchasers of its goods. Under the terms of the warranty the manufacturer undertakes to make good, by repair or replacement, manufacturing defects that become apparent within three years from the date of sale to the purchasers. Explain accounting treatment Under IAS37 for a) On 31 January 20X1 a manufacturing defect was detected in the goods manufactured by the entity between 1 December 20X0 and 31 January 20X1. b) At 31 December 20X0 (the entity's reporting date) the entity held about one week's sales in inventories. C) The entity's financial statements for the year ended 31 December 20X0 have not yet been finalized