RSM320H1 Chapter Notes - Chapter 13: Current Liability, Current Asset, Financial Statement
Document Summary
Ifrs and aspe currently define a liability as: an obligation of an enterprise, arising from past transactions or events. The settlement of which may result in the transfer or use of assets or provision of services, or other yielding of economic benefits in the future: current definition and characteristics. A constructive obligation arises when past or present practice shows the entity acknowledges a potential economic burden. Subsequent measurement generally at amortized cost (except those held for trading, such as derivatives, where fair value is used: non-financial liabilities, aspe: no specific measurement standards (measurement varies based on nature of liability) In both cases, interest expense must be accrued regardless of when cash payment is made. Signs a 4-month, 12% note on march 1. Interest accrual at june 30 year end: note repayment. For zero-interest-bearing notes, the difference between the present value of the note and the face value of the note represents the interest.
