Amisha Acharya
Bus 305 Fundamental Accounting Principles
Presidential Business School
Westcliff University
Mr. Birendra Mahatto
Professor: Dr. Yvan Nezerwe
February 4, 2018 Abstract
This analysis will highlights on to the Polaris Industries. Here, we described about the Polaris Company and warranty concept. The strategy the company used to produce the services to enlarge the customers is described well. The role of management accountant of the company is determined. We analyzed how the company determines warranty to the customers depending on the product. Two different annual report of Polaris Company is described and the major changes the company gets is clearly mentioned.
Polaris Industries founded on 1954 …show more content…
Access and read Polaris’ “Product Warranties” section of the “Organization and Significant Accounting Policies” footnote to its financial statements, from Appendix A. What is the warranty period for Polaris’ products? How does management establish and adjust the warranty reserve? What are some of the effects if the company’s actual results differ from its estimates? Answer: The warranty period of Polaris’s products range from six months to two years after the sale of products. The warranty periods for Off-Road Vehicles (“OFV”) are six months. One year for Snowmobiles and motorcycles, and two years for Small Electric Vehicles (SEVs). Local regulations, geographical markets condition, and promotional programmers are the warranties provided by the Polaris Company.
Using management’s best estimate based on historical rates and trends at the time of sales to the dealer the warranty reserve is established. On actual warranty claim experience, adjustments are made to the warranty reserve. The impact on future income occurs if Polaris’s warranty reserve is not done correctly. For example, when Polaris pays the additional warranty claims, the income will be lower in future years, if Polaris understates its warranty reserve in the current …show more content…
If company sales goods more the estimation of warranty leads to be more and less the sales less the estimation warranty occurs (i.e. vice-versa). In Polaris Company, the factors that could impact the warranty accrual in a given year include local regulations, improved manufacturing quality, marketing policies, changes in warranty coverage period, warranty policies adopted by competitors, product recalls, sales promotional schemes, and significant changes in sales volume. For example, the year when there is more snowfall then the snowmobiles selling be more and the warranty estimation will also be