Discuss whether the following items would meet the definition of a liability using the criteria currently in place under IFRS. If so, explain with reference to the appropriate criteria.

1.Environmental remediation when a chemical spill has occurred. This spill has violated an existing law and statute. Does a liability for cleanup exist?

2.Environmental remediation after a chemical spill has occurred. No existing law or statute has been broken. Does a liability for cleanup exist?

3.As part of its contract with the government, a logging company must replant one tree for each tree it cuts. Does a liability for replanting exist?

4.A logging company has a corporate policy of always replanting trees and advertises this fact in its corporate and marketing brochures. Does a liability for replanting exist?

5.An airline collects cash for tickets issued for future charter flights to exotic locations.

Answer rating: 100% (QA)

Answer 1 A liability for cleanup exist it is a duty or responsibility that the entity must fulfill a... View the full answer