Warranty Liability
Content
Definition
Warranty liability refers to the potential future costs a company may incur due to the warranty services promised to customers on its products or services.
Usage and Context
Warranty liability refers to possible future costs a company might face from warranty services on its products.
Frequently asked questions
- What does "warranty liability" mean? Warranty liability is the obligation a company has to cover repair or replacement costs under a product warranty.
- What is warranty liability classified as? Warranty liability is classified as a contingent liability on a company`s balance sheet.
- What is an assurance warranty? An assurance warranty guarantees that a product will meet certain quality and performance standards for a set time.
Benefits
Warranty liability reflects potential future costs related to warranty services on products.
Conclusion
Warranty liability accounts for future costs related to product warranty services.
