Headquartered in Quebec, RONA Inc. operates approximately 700 stores of various sizes and formats across Canada and is the largest Canadian distributor and retailer of hardware, home renovation, and gardening products. Note 19 accompanying RONA's 2009 financial statements provide details of its major guarantees, commitments, and contingencies. Portions of the note are presented below (amounts in thousands of dollars).
19. Commitments
In 2005, the Company entered into an eight-year partnership agreement for Olympic and Paralympic sponsorship valued at $60,000. Moreover, in 2006 the Company committed an additional amount of $7,000 to financial support programs for athletes. At December 27, 2009, the balance due on these agreements is $13,725, i.e. $9,925 in 2010, $1,900 in 2011 and $1,900 in 2012.
Required:
a. As at the date of the financial statements (December 31, 2009), did RONA have a liability related to its Olympic and Paralympic commitment? Explain why or why not.
b. Did the information provided in this note have to be disclosed to the readers of the financial statements? Explain your reasoning.