Danielle Madison owns a store called Mountainside Appliances that sells several different brands of refrigerators, stoves, dish washers, washers, and dryers. Each of the appliances comes with a factory warranty on parts and labour that is usually one to three years. For an additional charge, Danielle offers customers more extended warranties. These extended warranties come into effect after the manufacturers' warranties end.
Required:
Using IFRS guidelines for revenue recognition, discuss how Danielle should account for the revenue from the extended warranties.