AFM391 Lecture Notes - Lecture 1: Contingent Liability, Current Liability, Deferred Income
12 Feb 2018
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Nature of contingent assets and liabilities and their accounts. Nature of commitments and guarantees and their accrual accounting. Fv if they are going to be settled with a fv asset. Settlement will result in outflow from entity with resources with economic benefit. Recognition: when do we make that journal entry. Provision: records liability which was uncertain in timing and amount. Liabilities are recorded if they are uncertain under a provision. Ias37 that reliably estimate for liabilities can be obtained. Assets may not be measured reliably like r&d - treatment is different. Like settled through delivery of goods and services. Income tax and provincial tax payable - because its legislative in nature. Important to distinguish because how they are measured differs. Settled within 1 year of business year end or balance sheet date. No unconditional right to differ settlement for 12 months. Initially and subsequently measured at fv - held for trading.
