Homework Answers
Present obligation - an obligation is a present obligation if, based on the evidence available, its existence at the balance sheet date is considered probable, i.e., more likely than not.
Present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
In this case past event is sale of electric scooter with warranty. Also question also state that based on past experience it is probable that there will be some claims and ettlement of which is expected to result in an outflow from the entity of resources embodying economic benefits
If Cost also can be relaibilty measurable, then there exist present obligation.
Conclussion
A present obligation arises at the time of sale is made to the customer.
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