Accounting for Liabilities
In This Chapter
Delving into the definition of liabilities
Accounting for liabilities in the financial statements
Knowing how to handle trade payables
Lifting the lid on leases
Toiling over taxes
Every organisation incurs some form of liability on a daily basis. If you buy goods from a supplier on credit, you owe them money – that’s a liability; if your organisation has a bank loan, that’s a liability. You can’t get away from liabilities! The problem with liabilities is that, like everything else in the world of financial reporting, you get easy bits and then you get not so easy bits. But with a little help from this chapter, you can soon be handling liabilities expertly.
Here, you get a good grounding in what liabilities are, and how you classify them and recognise them in the financial statements under IFRS. And you discover how to account for the liabilities that you come across almost on a daily basis: trade payables, operating and finance ...