separately priced extended warranty

Revenue1

1. 605-20Services605 Revenue Recognition

   After ASU 2014-09 gutted most of legacy Topic 605, ASC 605-20 survives only as the guidance on recognizing a loss (onerous-contract provision) on separately priced extended warranty and product maintenance contracts. A separately priced contract is one whose price is not included in the original price of the covered product. If expected costs of providing the services plus any capitalized incremental cost of obtaining the contract exceed the related unearned revenue (contract liability), a loss must be recognized.