ACTG 3120 Lecture Notes - Lecture 1: Contingent Liability, Executory Contract, Current Liability
20 May 2016
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Week #1: chapter 12 financial liabilities and provisions. Liability = a present obligation of the entity arising from past events, settlement is expected to result in an outflow of economic benefits. Settlement can be in the future transfer of assets, provision of services. Liability criteria is: (a) expected future sacrifice of of assets/services, (b) is a present obligation, (c) result of a past transaction. The past transaction must be an obligating event. Financial liability = a contract that gives rise to a financial liability of one party and financial asset of other party (ex: loan payable: 2. Non financial liability = has no offsetting financial asset on the books of another party (provisions, unearned rev. , decommissioning obligations) Financial liabilities: classified in two ways: 1. Other financial liabilities: most fall here, valued at fv of transaction date, add any transactions costs, amortized cost valuation: 2.
