Q1 (a) What attributes should an item or transaction exhibit in order to be classified as a liability? (b) Define ‘Provisions’ as per AASB 137 with specific focus on the rules for measurement of Provisions.

Discuss creation of principal and agency relationship. What is vicarious liability?

Discuss the circumstances that require a contingent liability to be disclosed in the notes to the financial statements.

Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 14,000 hours for production: Variable overhead cost:         Indirect factory labor $44,800       Power and light 10,360       Indirect materials 21,000         Total variable overhead cost   $ 76,160 Fixed overhead cost:         Supervisory salaries $54,380       Depreciation of plant and equipment 14,310       Insurance and property taxes 26,710         Total fixed overhead cost   95,400 Total factory overhead cost   $171,560 Tannin has available 18,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 13,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost:         Indirect factory labor $40,560…

Explain how does a liability’s fair value change?

Under what circumstances is a contingent liability reflected in the accounting records as though an actual liability exists?

If a contingent liability is probable but estimable only within a range, what amount, if any, should the firm report?

Under IFRS, a liability is recorded if the chance of occurrence is Select one: A. probable. B. likely. C. undeterminable. D. unlikely.

Distinguish between a current liability and a long-termdebt.

а. Define what is an off-balance sheet activity? Also provide an example of an off-balance sheet liability.