MGCR 211 Chapter Notes - Chapter 9: Unsecured Debt, Contingent Liability, Loyalty Program

• School: McGill University
• Department: Management Core
• Course: MGCR 211
• Professor: Erica Pimentel

Document Summary

Liability: the company"s obligations arising from past transactions or events. Must have the following 3 characteristics: represents a duty, responsibility, or obligation that imposes an economic burden. Exists at the present time contingent liability: liability has not been recorded in the accounts, because the obligation is conditional, dependent, or contingent on the occurrence of a low- probability future event. Partially executed contract: one in which one party has performed part or all of its obligation. A liability should be valued at its present value on the date it is incurred. The total of the payments to be made --- however, might not adequately measure the liability"s value. -- > this ignores the time value of money current liabilities: obligations that must be fulfilled within one year. Warranty obligations corporate income taxes: recording the estimated warranty expense and obligation , at the time of sale. 2010: warranty expense 3 000 estimated warrant obligation. Unearned revenues: contracts, down payments, etc.