Question: Young Ltd estimates its future liability for repairs to products sold with a 12-month warranty as a percentage of its net credit sales. Warranty expense

Young Ltd estimates its future liability for repairs to products sold with a 12-month warranty as a percentage of its net credit sales. Warranty expense and actual repair costs for the last 2 years ending 30 June were as follows.

Comment on Young Ltds accounting method for warranty liabilities. What action should be taken with respect to the accounting estimates? If an investigation during 202122 finds that the figure for warranty expense was incorrectly calculated for 202021 and should have been $70 000, what action is required under AASB 108/IAS 8?

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