Liabilities Q4

Week 9 Liabilities

Q4:

If an aspect of our firm meets the ‘time-based’ trifecta of being a liability, does this mean we will include this aspect of a liability in our firm’s accounts and financial statements? Why or why not?

A:

No it does not. 

Once an aspect of a firm meets the requirement of a liability, it will only be recognised, or included, as a liability in our firm’s accounts and financial statements if it also meets the ‘quinella’ of the expected future outflow of economic benefits, being probably and able to be measured reliably.

AASB CF Framework for the Preparation and Presentation of Financial Statements para 91.
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