Explain whether each of the following would be considered a liability according to IFRS (using the criteria from the chapter) on December 31, 2017. Intuitively, would you consider each of these items a liability, regardless of how it's accounted for according to IFRS? Explain.
a. The cost of providing warranty services to a customer who purchased a product in 2017. The warranty covers parts and labour for three years from the date of purchase.
b. A company borrows $950,000 on January 8, 2018. The loan bears an annual interest rate of 7.5 percent and must be renewed each year.
c. A small business signs a two-year, non-cancellable lease on office space in a down town building in December 2016. The lease requires the business to pay $10,000 in rent over the two years of the lease.

  • CreatedFebruary 26, 2015
  • Files Included
Post your question