rsm220 case draft

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Department
Rotman Commerce
Course
RSM220H1
Professor
Dragon Stojanovic
Semester
Fall

Description
ISSUE 1 Accounting for the Royalty Payments The major issue falls in the presentation part of the conceptual framework hereAlternative 1Record It as a Liability According to IAS 3710 A liability is a present obligation of the entity arising from past events the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefitsBased on this definition the royalty payment will be treated as a liability The royalty payment arising from a past contract meets the definition of a liability as it would result in an outflow of entitys resources The amount is measurable therefore it must be shown as a current liability for the current year and long term liability for the next 4 years Moreover the
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