Advanced Accounting: Memo To Colleague At Accounting Firm
No more than 1500 words.
due date is 22/04/2017 6:00 pm Australian time
Harvard Reference.
Advanced Accounting
Name
Institution
Date
Memo to colleague at accounting firm To: Franklin Accounting Services
From:
Date April 22 2017 Subject: Changes to the definition of a Liability and description of a present obligation The existing definition of the liability of an entity highlights that it is the “present obligation that arises from the past events and there is expected to result in reflects resource outflows from the entity that embody economic benefits,” (IFRS 2013, p.4). As such, liability is a present obligation and this differentiates it from future commitments. The liability relates to the personal events and obligation that arise when the asset or service is received or there is a recoverable agreement to acquire the asset or service. The third component of the definition is that the liability is associated with the outflow of economic resources and this includes cash payments, transfer of other assets, obligations that arise, provision of services and replacing one obligation with another. The present obligation arises when there is no alternative, but to settle the obligation arising from past events for an entity that has received economic benefits or conducted activities that establish the obligation (IFRS 2013, p. 4). The proposed changes highlight that a “liability is recognized as a present obligation arsing out an entity transferring economic resources arising from past events” (IFRS 2013, p. 4). I highlight t...
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