Post Graduate Essay

In addition, the contain group had encouraged her to illustrate her tentative answers with numerical illustrations using case data. Prior Knowledge Kim soundless from the background readings assigned for her accounting course that Generally Accepted Accounting Principles (GAAP) defined liabilities as verisimilar future sacrifices of sparing benefits arising from present obligations of a particular entity to transfer as answers or provide services to another(prenominal) entities in the future as a result of past transactions or events. Kim also knew low International Financial Reporting Standards (IFRS) that liabilities were recognized on the balance sheet when It is probable that an outflow of resources embodying economic benefits allow for result from the settlement of a present obligation and the amount at which the settlement will take place can be measured reliably. Further, Kim understood from her readings that there was a special set of accounting rules covering conting ent liability recognition and disclosure. Under GAAP, a contingency is an existing causality involving uncertainty as to possible gain or loss.