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IFRS For Dummies by Steven Collings

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Chapter 7

Examining Liabilities You Don’t See Every Day

In This Chapter

arrow Pondering over provisions

arrow Considering contingent liabilities

arrow Finding your way through financial liabilities

arrow Piecing together pension and employee benefits

Companies incur liabilities on a daily basis. For example, buying goods from a supplier may incur a liability on the part of the company to the supplier, which is only settled when the company pays the supplier (known as a trade payable). Another example is a bank loan that a company takes out. These are liabilities that you come across during your life as an accountant (for more on common liabilities, see Chapter 6).

In this chapter, I look at liabilities that may not crop up in every company. Some companies can undertake extremely complex transactions, which may give rise to issues that need careful thought and consideration.

To kick off, I look at provisions and contingencies. Say a company has a disagreement with a third party. The company may have to look at making a provision for a liability or make additional disclosures concerning the issue. I examine ...

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