Use the definition of a liability to explain why taxes payable is a liability.
Answer to relevant QuestionsWhat is a liability? According to IFRS, what are the characteristics of a liability? Do you think these characteristics capture every obligation an entity has? Explain.Why do IFRS require disclosure of operating lease obligations and significant purchase commitments? What is an accrued liability? What is a provision? Distinguish among an accrued liability, provision, and accounts payable? Under what circumstances are accrued liabilities and provisions required?What are off-balance-sheet liabilities? Why do some entities find keeping some liabilities off-balance-sheet attractive? How do off-balance-sheet liabilities affect stakeholders' ability to interpret financial statements? ...What is the interest coverage ratio? What information does the interest coverage ratio provide?
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