Accounting > TEST BANK > Intermediate Accounting, Volume 2, 13th Canadian EditionDonald E. Kieso | TEST BANK (All)

Intermediate Accounting, Volume 2, 13th Canadian EditionDonald E. Kieso | TEST BANK

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CHAPTER 13 NON-FINANCIAL AND CURRENT LIABILITIES CHAPTER STUDY OBJECTIVES 1. Understand the importance of non-financial and current liabilities from a business perspective. Cash flow management i... s a key control factor for most businesses. Taking advantage of supplier discounts for prompt payment is one step companies can take. Control of expenses and related accounts payable can improve the efficiency of a business, and can be particularly important during economic downturns. 2. Define liabilities, distinguish financial liabilities from other liabilities, and identify how they are measured. Liabilities are defined as an obligation of an entity arising from past transactions or events that are settled through a transfer of economic resources in the future. The entity should have little (or no) ability to avoid the duty or responsibility. Financial liabilities are a subset of liabilities. They are contractual obligations to deliver cash or other financial assets to another party, or to exchange financial assets or liabilities with another party under conditions that are potentially unfavourable. Financial liabilities are initially recognized at fair value, and subsequently either at amortized cost or fair value. ASPE does not specify how non-financial liabilities are measured. However, unearned revenue is generally measured at the fair value of the goods or services to be delivered in the future, while others are measured at the best estimate of the resources needed to settle the obligation. Under IFRS, non-financial liabilities other than unearned revenue are m [Show More]

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