CERTYNEX IFRS ACADEMY

Vrynois increases a warranty provision following new claims. Its accountant charges the increase to opening retained earnings 'so as not to penalise the year'. What is the error?

The increase should have been spread over the next three years.

The provision should have remained unchanged until the claims are paid.

There is no error: charging equity is allowed.

The effect of a change in estimate goes through the period's profit or loss.