Week 9 Liabilities
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?
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.