Accounting for Liabilities

Project Description:

In the liabilities section of its 2016 balance sheet, Bank of America reported "noninterest-bearing deposits" in its U.S. offices of over $438 billion. Bank of America is a very large banking company. In the liabilities section of its 2016 balance sheet, Newmont Mining Corporation reported "reclamation and remediation liabilities" of more than $2.0 billion. Newmont Mining is involved in gold mining and refining activities. In its 2016 balance sheet, Delta Air Lines' largest current liability reported was $4.6 billion for "air traffic liability."

Read the following articles and answer the two questions below:

"Non-Interest-Bearing Current Liability (NIBCL)" https://www.investopedia.com/terms/n/nibcl.asp#:~:text=A%20non%2Dinterest%20bearing%20current,expenses%20such%20as%20account%20receivables

"North American surety: Protecting your reclamation liability" https://www.willistowerswatson.com/en-SA/insights/2017/09/mining-risk-review-north-american-surety-protecting-your-reclamation-liability

"What does it mean when airline revenues are adjusted for air traffic liability?" https://www.investopedia.com/ask/answers/061615/what-does-it-mean-when-airline-revenues-are-adjusted-air-traffic-liability.asp

1. For each of the preceding liabilities, explanation of what you believe the nature of the liability to be, and how the company will pay it off. To develop your answers, think about the nature of the industry in which each of the companies operates.
2. Of the three liabilities described, which do you think poses the most risk for the company? In other words, for which liability are actual costs most likely to exceed the liability reported on the balance sheet? Uncertainty creates risk.