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4 Cards in this Set
- Front
- Back
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When are dividends considered a liability? |
When declared (both common and preferred stock dividend). Dividend in arrears on cumulative preferred stock are not a liability but must be disclosed. |
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How does IFRS define a financial liability? |
Any liability that is: a) a contractual obligation to deliver cash or another financial asset b) a contractual obligacion to exchange financial instruments under unfavorable conditions. c) a contract that may be settled in the entity's own equity instruments. |
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What are current liabilities? |
Liabilities that will be settled within one year or the operating cycle, whichever is longer. |
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IFRS definition/treatment of provisions, contingent liabilities and contingent assets |
Provisions IAS 37 establishes the definition of a provision as a "liability of uncertain timing or amount", and requires that all the following conditions be fulfilled before a provision can be recognized: - the entity currently has a liability as a result of a past event - an outflow of resources is likely to be needed to settle the liability - the amount of the obligation can be estimated reliably. The standard also details measurement methods for provisions, generally requiring that the entity recognises a best estimate of the amounts needed to settle the obligation. Contingent assets and liabilities Generally defines assets and liabilities that arose from past events but whose existence will only be confirmed by the occurrence of future events that are not in the entity's control. Contingent assets and liabilities are not to be recognized in the financial statements, but are to be disclosed where an inflow of economic benefits is probable (assets) or the chance of outflows of resources is significant (liabilities). |
