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in this video were going to talk about how to account for premiums and coupons that firm sometimes offer so we know that firms will give incentives to customers in order to purchase their product and these incentives could be some kind of mail and rebate they could be if you submit X number of cereal box tops or X number of rappers or labels and then well send you a free toy these types of things these are just incentives to get customers to buy but when firms offer these incentives its very likely that theyre going to have to accrue a liability and the reason is again if we come back to what a liability is basically theres an obligation of the firm to sacrifice assets right so if the firm says ok you redeem X number of Box Tops well give you a toy well now the firm is going to have an obligation but we have to be able to determine a couple things if we remember our talk from contingent liabilities we need to know that the its probable that the firm has incurred a liability tha
