Liabilities

Question 1

What are the types of liabilities?

Answer 1

• legal obligation

- constructive obligation

Question 2

What are provisions?

Answer 2

A liability that is of uncertain timing or amount

Question 3

When should provisions be recognised?

Answer 3

• when the entity has a present obligation as a part event
• it is probable that there will be an economic transfer
• a reliable estimate can be made as to the amount to provide for

Question 4

What are contingent liabilities?

Answer 4

a probable obligation that arises out of past events, and whose existence will only be confirmed by the occurrence of one or more future events or not wholly in the entity’s control

Question 5

What are liabilities?

Answer 5

obligations of economic transfer because of a past event