7252569-MIdterm-1 (dragged) 9

7252569-MIdterm-1 (dragged) 9 - assessment of the ability...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 13-10 42. Contingent liabilities are disclosed if: x it is likely that a future event will confirm the existence of a loss but the loss cannot be reasonably estimated. x a loss has been recognized, but there is an exposure to loss that is higher than the amount that was recorded. x it is not possible to determine the likelihood of there being a future event that confirms the liability. 43. Contractual commitments are disclosed if they will result in future obligations that are unusual in nature or material in amount. Analysis 44. Analysts are interested in the liquidity of a company. Part of this analysis requires an
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Unformatted text preview: assessment of the ability to pay current obligations as they come due. These obligations arise from both financing activities (such as notes payable) and operations (such as accounts and salaries payable). Ratios that focus on current liabilities in this analysis include the current ratio, the acid-test ratio, and the days payables outstanding ratio. International Perspectives 45. Canadian accounting standards on current liabilities, contingencies, and commitments are largely converged with those of the IASB though there are some differences in classification, terms, and the comprehensiveness of requirements in classification, measurement, and disclosure....
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This note was uploaded on 03/28/2012 for the course ACCTG ACC423 taught by Professor Smith during the Spring '10 term at University of Phoenix.

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