中级财务会计(英文)课件Chapter 10 Current Liabilities And Contingencies

1. Conceptual Overview of Liabilities
Liabilities are probable future sacrifices of economic benefits arising from present obligations of a company to transfer assets or provide services to other entities in the future as a result of past transactions or events.
Liquidity
Liquidity refers to how quickly a liability can be paid, or its nearness to cash.
Intermediate Accounting 10 Current Liabilities And Contingencies
Intermediate Accounting 10 Current Liabilities And Contingencies
Operating Cycle
Inve来自百度文库tory
Cash
Receivables
Intermediate Accounting 10 Current Liabilities And Contingencies
Intermediate Accounting 10 Current Liabilities And Contingencies
Primary Liabilities Issues
1. Identification of liabilities—the detection of a company’s obligations. 2. Measurement or valuation of the liabilities and the related expense—the determination of an amount to attach to each obligation and to match as an expense against revenues. 3. Reporting on the financial statements—the specific disclosures in both the company’s financial statements and the related notes.
10 Current Liabilities And
Contingencies
I
ntermediate Accounting
中级会计学
Accounting School ·Zhongnan University of Economics & Law
Intermediate Accounting 10 Current Liabilities And Contingencies
Ways of Reporting Liquidity
1. Classify current liabilities and assets (mixture of operating-cycle and maturity-date approach). 2. Classify current liabilities and assets using the ―pure‖ operating-cycle approach. 3. Classify current liabilities and assets under the maturity-date approach only. 4. Adopt a different classification scheme, possibly using more classes. 5. Leave the balance sheet unclassified but arranging items in order of liquidity.
Intermediate Accounting 10 Current Liabilities And Contingencies
2.
Nature and Definition of Current Liabilities
Current liabilities are …or the creation of other obligations whose current liabilities within one liquidation is expected to year or an operating cycle, require the used of whichever is longer. existing current assets...
Intermediate Accounting 10 Current Liabilities And Contingencies
Three Essential Characteristics of a Liability
1. It involves a present duty or responsibility of the company to one or more entities that will be settled by the probable future transfer or use of assets at a specified or determinable date, on occurrence of a specific event, or on demand. 2. The duty or responsibility obligates the company, leaving it little or no discretion to avoid the future sacrifice. 3. The transaction or other event obligating the company has already happened.