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Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
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Operating Liabilities
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Obligations that arise from operating activities- a/p- unearned revenue- advance payments- taxes payable- post-retirement liabilities
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Financing Liabilities
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Obligations that arise from financing activities:- debt- bonds- notes- leases
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Lease
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Contractual agreement between a lessor (owner) and a lessee (renter)
gives the lessee the right to use an asset owned by the lessor for the lease term |
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Important features in analyzing liabilities
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1. terms of indebtedness - maturity, interest rate, pmt pattern, amount2. restrictions3. ability/ flexibility in pursuing further financing4. obligations5. dilute conversion features6. prohibitions on disbursement - such as dividends
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Capital lease accounting
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For leases that transfer substantially all benefits and risks of ownership
accounted for as:- an asset acquisition and a liability incurrence by the lessee- a sale and financing transaction by the lessor |
