ACCT3563 Lecture Notes - Lecture 2: Accrual, Operations Management, Sick Leave
Document Summary
Topic 2: provisions and contingent liabilities and employee benefits. Aasb 137 provisions, contingent liabilities and contingent assets. Aasb defines a provision as a liability of uncertain timing or amount. Trade payables for goods or services that have been received or supplied and have been invoiced or formally agreed with the supplier. Example: trade payable for inventory purchase on credit. Accruals for goods or services that have been received or supplied, but have not been invoiced or formally agreed with the supplier. Example: accrual for electricity where invoice not yet received (but you know when the next invoice will be and you can estimate the cost) Provisions for future payments to other parties in respect of past events where the amount and/or timing of the outflow is uncertain. Example: settlement of warranty claims on manufactured goods (you don"t know how much the repairs will be or when the repairs will be done)
