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What is the differnent between a current liability for an uncertain amount and a contingent liability?
Under current liability of uncertain amount liability is created on company although actual amount is unknown but in contingent liability, liability is not created on company unless specific date or time or occurence of any contingent action or activity.
What is an estimated liability?
An estimated liability is a financial obligation that a company anticipates it will incur in the future, but the exact amount or timing is uncertain. It is recorded on the balance sheet as a liability and is often based on historical data, industry standards, or management estimates. Examples include warranties, legal settlements, and environmental cleanup costs. This helps companies prepare for future expenses and maintain accurate financial statements.
What is the meaning of contigent liability?
I liability that may be incurred depending upon future event(s) Example- let there is a claim on a company existence of that liability is depends on decision of court so existence of that liability is uncertain so we can say that contigent liability is that liability which may occur or may not. ..
What is the difference between annual liability and annual flow liability?
Annual liability is the amount of liabilities you have at a specfied date, while annual flow liability is the amount of annual liability thatmust be repaid during the next financial year.
What is the meaning of outstanding liability?
The amount of liability which is yet to be paid as on the balance sheet date is known as outstanding liability
What is the differnent between a current liability for an uncertain amount and a contingent liability?
Under current liability of uncertain amount liability is created on company although actual amount is unknown but in contingent liability, liability is not created on company unless specific date or time or occurence of any contingent action or activity.
What is an estimated liability?
An estimated liability is a financial obligation that a company anticipates it will incur in the future, but the exact amount or timing is uncertain. It is recorded on the balance sheet as a liability and is often based on historical data, industry standards, or management estimates. Examples include warranties, legal settlements, and environmental cleanup costs. This helps companies prepare for future expenses and maintain accurate financial statements.
Is Provision for income taxes a current asset or liability?
Provisions are defined as liabilities of uncertain timing and amount. 2 types of provisions 1. provision that are in the nature of liabilities ( eg provision for warranty) 2. provisions that are in the nature of asset valuation ( eg provision for doubtful debt)
What is the meaning of contigent liability?
I liability that may be incurred depending upon future event(s) Example- let there is a claim on a company existence of that liability is depends on decision of court so existence of that liability is uncertain so we can say that contigent liability is that liability which may occur or may not. ..
What is the meaning of contigency?
I liability that may be incurred depending upon future event(s) Example- let there is a claim on a company existence of that liability is depends on decision of court so existence of that liability is uncertain so we can say that contigent liability is that liability which may occur or may not. ..
How does estimated liabilities affect the financial statements?
Two forms of estimated liabilities (IAS 37) -Provisions (liabilities which are uncertain in timing or amount) -Contingent Liabilites (possible obligation where either the amount cannot be reliably measured or the outflow is not probable) A Provision would be recorded as a normal liability however it would be measured at the Present Value of the best estimate required to settle the obligation (also requires substantial note disclosure) Note: Will result in defered tax! A Contingent liability will result in only note disclosure- and thus will have no effect on the quantintative aspect of the financial statments.
What is the difference between annual liability and annual flow liability?
Annual liability is the amount of liabilities you have at a specfied date, while annual flow liability is the amount of annual liability thatmust be repaid during the next financial year.
Will Letter of credit be shown as contingent liabilities?
Yes, the letter of credit are to be shown as Contingent Liability. As the occurrence of this liability depends on the happening or non happening of uncertain future event.
What are the differences between contingency and contingent liabilities?
Contingent liabilities are liabilities that might be incurred and the outcome is uncertain. They are recorded when the future events are probable to happen and the amount can be estimated reasonably. They include obligations related to product warranties. A contingency is an existing situation where there is uncertainty about possible loss or gain that will not be resolved in the near future.
What is the meaning of outstanding liability?
The amount of liability which is yet to be paid as on the balance sheet date is known as outstanding liability
An amount owed by a business?
Liability
How is deferred tax liability different from current tax liability?
Current Tax Liability is that tax amount which is actaully payable in current year.Deffered Tax liability is that amount of tax liability which is created due to difference in net income in income statement and income according to tax authorities.
