Search results
Results from the WOW.Com Content Network
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 ...
It sets out the accounting and disclosure requirements for provisions, contingent liabilities and contingent assets, with several exceptions, [1] establishing the important principle that a provision is to be recognized only when the entity has a liability. [2]
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 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.
[79] Liabilities are absolute or contingent. The Supreme Court defined a contingent liability as "a liability which depends for its existence upon an event which may or not happen." [5] If a liability is not contingent, it is absolute. However, the jurisprudence interpreting subsection 13(21) of the Act does not ask whether the liability ...
Whilst the standard on provisions, IAS 37, prohibits the recognition of a provision for contingent liabilities, [23] this prohibition is not applicable to the accounting for contingent liabilities in a business combination. In that case the acquirer shall recognise a contingent liability even if it is not probable that an outflow of resources ...
Borrowing money to cover current expenses is another warning sign, he offered. "It makes sense to file if a creditor is going to be able to take away something you need," said Pamela Foohey, a ...
the amount of the liability can be determined with reasonable accuracy, and; economic performance has occurred with respect to the liability. [3] Gold Coast Hotel is an example of a court applying the "all events" and "reasonable accuracy" prongs to determine whether a contingent liability is a deductible business expense.