Apologies if this is the most basic question, but I'll happily plead ignorance on this.
We have purchased a capital asset (a ship) with a years' warranty. All costs up until she became fully operational has been capitalised and all work beyond that has been put to the P&L.
With the warranty work, nothing has been provided for as the timings and amounts of possible warranty claim receipts cannot be estimated reliably. Whereas we have submitted claims with specific supporting invoices, we go in with almost an expectation of receiving nothing back.
We have now received a confirmation of a mutually-agreed sum that doesn't amount to what we have claimed, and we have no way of tracing this sum to the original invoices. With some of the work being in capital codes (41% to be exact when it comes to these two), what would be the generally accepted method to account for this? Preference would be to add to revenue, but I have a feeling that might not completely fly when it comes to audit. Should I apportion the sum received equally between the assets it relates to, and allocate 41% into capital, with the rest into income? That would in my mind go with the matching principle...