IFRS For Dummies

Chapter 6

Accounting for Liabilities

In This Chapter

Delving into the definition of liabilities

Accounting for liabilities in the financial statements

Knowing how to handle trade payables

Lifting the lid on leases

Toiling over taxes

Every organisation incurs some form of liability on a daily basis. If you buy goods from a supplier on credit, you owe them money – that’s a liability; if your organisation has a bank loan, that’s a liability. You can’t get away from liabilities! The problem with liabilities is that, like everything else in the world of financial reporting, you get easy bits and then you get not so easy bits. But with a little help from this chapter, you can soon be handling liabilities expertly.

Here, you get a good grounding in what liabilities are, and how you classify them and recognise them in the financial statements under IFRS. And you discover how to account for the liabilities that you come across almost on a daily basis: trade payables, operating and finance ...