TPPL had finalised its accounts for the year ending 31 December 20X1. The date of authorization of financial statements

[answerhappygod]

TPPL had finalised its accounts for the year ending 31 December
20X1. The date of authorization of financial statements for issue
was 22 March 20X2. Before the financial statements were issued, the
following information came to your attention, i.e. TPPL’s usual
practice was to offer one-year warranty on all the watches sold by
the company. In order to provide better customer service, the board
of directors decided during a board meeting in December 20X1 to
give a two-year warranty for all watches sold, including those sold
before 20X1. The policy of the two-year warranty was announced in
the middle of January 20X2 through a promotional campaign and the
terms and conditions were made available on the company’s website.
Explain and discuss how TPPL should treat this scenario in its
financial statements for the year ended 31 December 20X1 under the
applicable SFRSs. (8 marks)