Answered: Under IFRS, a provision is the same as:…

Under IFRS, a provision is the same as: a. a contingent liability. b. an estimated liability. c. a contingent gain. d. None of the above.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 3Q: What is the difference between a noncurrent liability and a current liability?

See similar textbooks

Related questions

Q: Determine when a liability can be classified as a noncurrent obligation.

A: Liabilities are obligations arising from past transactions and payable in assets or services in…

Q: What's the difference between IFRS and US GAAP when it comes to the word "contingent liability"?

A: Contingencies - Existing Condition involving uncertainty that may result in possible gain (gain…

Q: What is meant by contingent Liability? How is it shown in final accounts?

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: 18-Which one of the following category unearned revenue belong to? a. Limited liability b. Lon-term…

A: The Unearned revenue is the revenue received in cash but not earned yet.

Q: Under what conditions should a contingent liability berecorded?

Q: When should a contingent liability be recognized and reported on the financial statements? A.…

A: Contingent liability: A liability can occur on future uncertain events.

Q: Which of the following is not a condition necessary to exclude a short-term obligation from current…

A: SHORT-TEAM OBLIGATIONS: Debt, also called current liabilities, is a firm's financial obligations…

Q: contingent liabilities? Which two conditions have to be met in der to report a contingent liability…

A: The foundation for determining investor returns and analyzing a company's financial structure is the…

Q: Which one of the following category unearned revenue belong to? a. Limited liability b. Current…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Why is Unearned Revenue considered a liability?

A: Unearned revenue is the revenue that has not been earned yet but payment has been received from the…

Q: Define the term contingent liability.

Q: 6. A liability is recognized in the statement of comprehensive income when it is probable that an…

A: As per IASC framework, the liability is recognized in the financial statement when two conditions…

Q: When an obligation is subject to an obligation, the moment the condition is fulfilled, the…

A: The following statement is True... When an obligation is subject to an obligation, the moment the…

Q: Which of the following statements is true concerning contingent liabilities? a. Such liabilities…

A: A contingent liability is a liability that may occur depending on the outcome of an uncertain future…

Q: An estimated liability is an obligation which is uncertain as to: * A. NO - amount; YES -…

A: Liability means the amount which is to be paid to an outsider by business.Generally liabilities have…

Q: An obligation that is contingent on the occurrence of a future event should be reported in the…

A: Financial statements: The financial statements refer to the combination of a various statements like…

Q: What is a contingent liability?

A: Liabilities are legitimately restricting commitments that are payable to someone else. In accounting…

Q: A contingent liability whose payment is generally probable

A: Contingent liability is the liability that may or may not happen in the future based on an event.…

Q: What are “liability gains and losses,” and how are theyaccounted for?

A: Liability gains and losses arise from the unexpected increase or decrease in the value of projected…

Q: What is/are the rule/rules (and the exceptions, if there be any) in case an object is lost or…

A: Fortuitous events are the events that are considered as the "act of God" because naturally, the act…

Q: Which one of the following category unearned revenue belong to? a. Current liability b. Limited…

A: Unearned revenue is a liability till the performance has been done by the supplier.

Q: I. A provision is a present obligation which may either be legal or constructive. II. Even if a…

A: As per IAS 37 Provisions, Contingent Liabilities and Contingent Assets, A provision is a present…

Q: What is a Current Liability? Explain its Characteristics.

A: Current liability refers to the obligation of enterprise which are due within normal cycle of…

Q: If a contingent liability is probable but estimable only within a range, what amount, if any, should…

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: Liabilities are present obligation which represent O legal only O expected value O neither legal or…

A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…

Q: Which of the following would most likely be classified as a current liability?

A: It can be defined as the liability that becomes due and is to be repaid with a span of 12 months or…

Q: Analyse the concept of “Limited liability”

A: The shareholders of a company or the partners of a partnership have to initially put up some capital…

Q: For a liability to be recognised within the financial statements, it needs to be reasonably apparent…

A: As per IFRS a liability is that the future payment of which results…

Q: What is the difference between a current liability and a long-term liability?

A: Liabilities are the amount of money which a company raise from outside. The amounts can be raised…

Q: Define (a) a contingency and (b) a contingent liability

A: a. Contingency: Contingency refers to an uncertain situation in which the uncertain situation exists…

Q: 1. Which of the following modification of terms will not qualify for derecognition of financial…

A: Solution Concept Derecognition of financial liability A financial liability is derecognized when the…

Q: Which among the following suits best for Unearned revenue? a. Liability b. Expense c. Revenue d.…

A: Unearned Revenue: Unearned Revenue means money received from the customer in advance for the service…

Q: A contingent gain can sometimes be disclosed in a footnote A. True B) False

A: Financial management refers to planning organization direction and control of financial activities…

Q: The following obligations are immediately demandable, EXCEPT: a pure obligation obligation with…

A: There are obligation to be paid immediately but there are some conditional liabilities they occur…

Q: What is the difference between the use of the term contingent liability in U.S. GAAP and IFRS?

A: Contingent Liability Contingent liability is one form of liability that arises based on a…

Q: What is a contingent liability? Provide some examples of contingencies.

A: Explain the meaning of contingent liability and provide some examples: A contingent liability, as…

Q: One of examples of contingent liability is an: * a. Obligations related to product warranties b.…

A: As per IFRS 37 provisions, contingent liabilities and Contingent assets. A provision is an present…

Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Under IFRS, a provision is the same as:

a. a contingent liability.

b. an estimated liability.

c. a contingent gain.

d. None of the above.

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Current liabilities, Provisions and Contingencies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is a contingent liability?
What is a contingent liability? Provide some examples of contingencies.
Which of the following is a characteristic of a current liability? A. It is an avoidable obligation. B. It occurs because of a future transaction or event. C. It cannot be settled with services. D. It creates a present obligation for future payment of cash or services.
The accrual of a contingent liability and the related loss should be recorded when the a. Loss resulting from a future event may be material in relation to income. b. Future event that gives rise to the liability is unusual in nature and nonrecurring. c. Amount of the loss resulting from the event is reasonably estimated and the occurrence of the loss is probable. d. Event that gives rise to the liability is unusual and its occurrence is probable.
The present obligation is not a contingent liability but shall be recognized as a provision when *a. Amount is reasonably estimable and event occurs infrequentlyb. Amount is reasonably estimable and occurrence of event is probablec. Event is unusual in nature and occurrence of event is probabled. Event is unusual in nature and event occurrs infrequently
State with reason whether the following statements are true or false Contingent liability is an ascertained liability but its amount and due date are indeterminate.
A contingent liability O always exists as a liability but its amount and due date are indeterminable. O is accrued even though not probable. O is always the result of a loss contingency. O is not reported as a liability if not probable.
Which one of the following category unearned revenue belong to? a. Limited liability b. Current liability c. Lon-term liability d. Contingent liability
An estimated liability is an obligation which is uncertain as to: * A. NO - amount; YES - existence B. YES - amount; YES - existence C. NO - amount; NO - existence D. YES - amount; NO – existence
When should a contingent liability be recognized and reported on the financial statements? A. Reporting contingent liabilities do not require they be probable or reasonably estimated B. When the contingent liability is probable C. When a reasonable estimation can be made of the amount owed D. When the contingent liability is probable and a reasonable estimation can be made of the amount owed
Fair Value (Liabilities) What is Fair Value for a liability? What would be an e.g? Please Explain.
'A provision and a contingent liability are the same.' Briefly discuss *********correct answer please ***************