Warranty replacement asset records · AU
What bookkeeping is needed when business equipment is replaced free under warranty?
Short answer
Keep the warranty documents and link the replacement to the original equipment record. Do not record a purchase payment that never occurred. Update identifying details and ask your accountant whether the replacement requires any asset, depreciation or tax adjustments.
Detailed answer
Preserve the link between the original asset and its replacement
Collect the original purchase invoice, warranty claim approval, return authorisation and replacement delivery note. Record the old and new serial numbers, the date the original item stopped being used and the date the replacement became available for use. This helps distinguish a warranty exchange from a second asset purchase or a disposal followed by a new purchase. A delivery note showing a retail value is not, by itself, evidence that the business incurred that cost. Update the equipment register so a later stocktake does not count both machines when only the replacement remains on site.
Separate a free exchange from upgrades and additional costs
Check whether the supplier replaced the item with an equivalent model, issued a credit note, refunded money or charged for an upgrade. Those are different transaction patterns and should not share an automatic bookkeeping rule. Keep freight, installation and upgrade invoices separately for assessment rather than adding every amount to the original asset without review. Your accountant should consider the original carrying amount, the nature of the replacement and whether useful-life estimates need revisiting. Avoid automatically restarting depreciation at the replacement’s advertised price. Reconcile any supplier credit and replacement invoice together so the accounts do not show a debt that the warranty arrangement has already settled.
Official sources
Published by Expert Bookkeeping Services · Last updated 2026-11-01. General information only — confirm specifics for your situation with a qualified adviser.
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