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Unformatted text preview: ebct/ur w/lc5122001.tp0/cobaltM ainFr ame.dowebct 3/6 8/27/13 Blackboar d Lear ning System Non- f inanc ial liabilit ies are usually not payable in c ash and, t heref ore, measured dif f erent ly.
F ollowing are some of t he examples of non- f inanc ial liabilit ies:
Unearned Rev enue is c ash rec eived f rom a c ust omer in one period f or goods or servic es t hat
are t o be provided in a f ut ure period and t heref ore rec ognized as obligat ion f or an ent it y.
Unearned revenue is c lassif ied as liabilit y and is measured at t he f air value of t he goods or
servic es t o be delivered in t he f ut ure.
An asset retirement obligation, a non- f inanc ial liabilit y, is measured at t he best est imat e of
t he expendit ure required t o set t le t he present obligat ion at t he balanc e sheet dat e or t ransf er it
t o a t hird part y.
C ontingent liabilities are t he amount a c ompany might have t o pay dependent upon whet her a
f ut ure event oc c urs or not .
Ac c ording CICA Handbook, Sec t ion 3290 “Cont ingenc ies”, GAAP def ines a c ont ingenc y f or a
c ompany as, “an exist ing c ondit ion or sit uat ion involving unc ert aint y as t o possible gain or loss
t o an ent erprise t hat will ult imat ely be resolved when one or more f ut ure event s oc c ur or f ail t o
oc c ur” (Def init ion sec t ion, para....
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This note was uploaded on 02/05/2014 for the course BUS 370 taught by Professor Andreathomas during the Spring '13 term at Capital University.
- Spring '13