RESEARCH ESSAY TOPIC
"The definition of liabilities is comprehensive in its coverage: indeed, some would argue that it is too comprehensive in that it makes no attempt to distinguish between liabilities and commitments, as it includes obligations arising from firm contracts where neither the entity nor the counter party has honoured its promises."
Australian Accounting Research Foundation (AARF), 1998, Measurement in Financial Accounting, Accounting Theory Monograph, AARF, Melbourne, p. 36.
1. With reference to the above statement describe what you understand by the term liabilities and how they are measured.
2. Discuss liabilities and the problems of measurement in the context of the present IASB framework.
3. Select a company from the Australian Securities Exchange website and download the 2014annual report. Evaluate the categorisation and treatment of liabilities in the annual report.
4. Comment on the relationship between the measurement of liabilities and decision useful information with examples from your selected annual report.