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It establishes that contingent assets and liabilities are not to be recognized in the financial statements, but are to be disclosed where an inflow of economic benefits is probable (assets) or the chance of outflows of resources is not insignificant (liabilities). [4]
In accounting, contingent liabilities are liabilities that may be incurred by an entity depending on the outcome of an uncertain future event [1] such as the outcome of a pending lawsuit. These liabilities are not recorded in a company's accounts and shown in the balance sheet when both probable and reasonably estimable as 'contingency' or ...
The recording of the liability in the entity's balance sheet is matched to an appropriate expense account on the entity's income statement. In U.S. Generally Accepted Accounting Principles (U.S. GAAP), a provision is an expense. Thus, "Provision for Income Taxes" is an expense in U.S. GAAP but a liability in IFRS.
Current liabilities – these liabilities are reasonably expected to be liquidated within a year. They usually include payables such as wages , accounts , taxes , and accounts payable , unearned revenue when adjusting entries , portions of long-term bonds to be paid this year, and short-term obligations ( e.g. from purchase of equipment).
The Conceptual Framework defines the elements of financial statements to be: [19] Asset: A present economic resource controlled by the entity as a result of past events which are expected to generate future economic benefits. Liability: A present obligation of the entity to transfer an economic resource as a result of past events.
GASB 45, or GASB Statement 45, is an accounting and financial reporting provision requiring government employers to measure and report the liabilities associated with (other than pension) postemployment benefits (or OPEB). Reported OPEBs may include post-retirement medical, pharmacy, dental, vision, life, long-term disability and long-term care ...
It exited its fiscal Q1 with total liabilities of $7.2 billion, $3.1 billion of which was long-term debt. Contrast this with its total assets at that time of $7.9 billion.
The formal accounting distinction between on- and off-balance-sheet items can be quite detailed and will depend to some degree on management judgments, but in general terms, an item should appear on the company's balance sheet if it is an asset or liability that the company owns or is legally responsible for; uncertain assets or liabilities ...