Refund liability

Booking returns only when they arrive, which overstates revenueFoundationsRevenueInflows or other enhancements of assets, or settlements of liabilities, from delivering or producing goods, rendering services or carrying out other activities — recognized when control transfers, not when cash arrives in the month of sale and understates it later.

Debiting revenueFoundationsRevenueInflows or other enhancements of assets, or settlements of liabilities, from delivering or producing goods, rendering services or carrying out other activities — recognized when control transfers, not when cash arrives directly instead of a contra accountCore ledgerContra accountAn account with the opposite normal balance to its type, presented as a deduction from its parent — accumulated depreciation against PP&E, the allowance against AR, which hides the return rate from the P&LStatementsP&LPerformance over a period.

Leaving the estimate unchanged for a year while actual returns run well above or below it.