StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Essay example - An Analysis of Contingent Liabilities and Assets

Only on StudentShare
Finance & Accounting
Pages 8 (2008 words)
Your Name Your University An Analysis of Contingent Liabilities & Assets 8 April 2012 Table of Contents Introduction 3 Contingent Assets & Liabilities 3 Introduction Contingent Assets & Liabilities IAS 37 offers guidance on the recognition of provisions and the disclosure of contingent liabilities (Greuning et al., 2011)…

Extract of sample

It will first examine the link between uncertain transactions and mainstream accounting, will review the rules pertaining to the recognition of contingent assets and liabilities and examine the similarities and differences with US accounting standards.Purpose of IAS 37 A provision is a charge against profits for the purpose of offsetting liability or loss (Hanif, 2005). From this definition, there are three possible reasons why these provisions would be made: 1. For liabilities and changes like provision for income tax. 2. For valuation adjustments for fixed assets like the provision for income tax. 3. For valuation adjustments for current assets like the provision for bad and uncertain debts (Hanif, 2005). Contingent liabilities and their position in financial accounting have a strong connection with recognition (Robinson, 2008). Recognition is the process of incorporating items that meet the definition of elements in financial statements (asset, liabilities, equity, income and expenses) into the balance sheet or income statement (Robinson, 2008). The fundamental requirement for recognition is probability and measured reliability (Arboleda & Bessis, 2011). In other words, for a transaction to become an element in a financial statement, it must have a high chance of being carried out. ...
Download paper
Not exactly what you need?

Related papers

Financial Reporting and Analysis
Favourism on one party over the other which is intentional should not exist concerning the information on financial reports. The financial statements will henceforth, provide a balanced scorecard to all the parties I relation to the effects of the transactions. b) The Board may be required to abandon neutrality and establish standards of reporting that conceals the particular transactions impact…
8 pages (2008 words)
Types of Accounting Systems
“Under cash based accounting revenue is recorded when cash is received, and expensed is recorded when cash if paid” (Weygant, et. al. 2002, pg.89). The use cash based accounting is suitable for small businesses that deal primary in cash such as a hot dog vendor or a pizza cart. The use of cash based accounting is not in compliance with the generally accepted accounting principles, thus public…
4 pages (1004 words)
Finance and Accounting Homework
Cost is a crucial aspect, and it facilitates realization of defined results in verifiable and objective amount. The matching of this accounting concept is usually facilitated in order to ensure that there is an accomplishment of radical goals within the depreciation expense parameters. Lump sum purchases should be treated in a way that plant’s asset useful life is well analyzed in a way that…
6 pages (1506 words)
Guillermo Furniture Store Analysis
By use of the weighted average cost of capital (WACC), multiple valuation methods in minimizing the risks and calculation of Net Present Value (NPV) of future cash flows including sensitivity analysis, the company can find a solution to the impending problem. Weighted Average Cost of Capital The weighted average cost of capital (WACC) refers to the rate of return that the company or business…
7 pages (1757 words)
JB-Hi Fi Limited
A brief analysis of the notes to the financial statement pertaining to the trade payable figure presents the fact that the trade payable figure also comprises of other figures such as GST payables, deferred income and other creditors and accruals. All of these items have shown significant increase over the financial year 2012, but the most significant increase is represented by the increase in the…
8 pages (2008 words)
Disclosure Analysis Paper
Winnebago Industries Inc runs their business of selling the manufactured vehicles, motor homes and automobile parts through independent dealers. Due to this business model, the positions of cash and cash equivalents, receivables and inventories attain significance. The financial parameters indicated in the financial statements represent the consolidated positions of the Winnebago Industries Inc…
3 pages (753 words)
Analysis of Earthwear financial statement audit.
The entities major liabilities are accounts payable and liabilities which accrue. The entity has no potential parties who are related to it. Other uses its credit to be able to meet all the normal financing duties. The company accounting financial condition and position is stable and good. There are no individual significant events and any transactions such as those of acquisitions or selling off…
7 pages (1757 words)