Chapter 18


This chapter was updated for the 12th edition by the editor. The views of Mr. Gill, as expressed in this publication, do not necessarily reflect the views of the AICPA. Official AICPA positions are determined through certain specific committee procedures, due process, and deliberation.

Frederick Gill, CPA

American Institute of Certified Public Accountants, Accounting Standards Team

18.1 Nature of Liabilities

(a) Definition of Liabilities

(i) Executory Contracts as Liabilities

(ii) Credit Balances That Are Not Liabilities

(b) Offsetting of Liabilities Against Assets

(c) Measurement of Liabilities

(d) Disclosures About Fair Values of Financial Instruments

18.2 Interest

18.3 Current Liabilities

(a) Nature of Current Liabilities

(i) Long-Term Obligations Approaching Maturity

(ii) Short-Term Obligations to Be Refinanced

(iii) Classification of Obligations Callable by the Creditor

(iv) Demand Notes

(v) Subjective Acceleration Clause in Long-Term Debt Agreements

(b) Kinds of Current Liability

(c) Accounts Payable: Trade

(d) Notes Payable: Bank

(e) Notes Payable: Trade and Others

(f) Accrued Expenses

(i) Interest Payable

(ii) Accrued Payrolls

(iii) Vacation Pay

(iv) Commissions and Fees

(v) Federal Income Taxes

(vi) Property Taxes

(vii) Rent Liabilities

(g) Advances from Officers and Employees

(h) Dividends Payable

(i) Deferred Revenue

(i) Contingencies

(i) Likelihood of Contingencies

(ii) Examples of Loss Contingencies

(iii) Accrual of Loss Contingencies

(iv) Estimating ...

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