.... What is a “Current Liabilities”? What is a liability? Probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or to provide services to other entities in the future as a result of past transactions or events. FASB Statement of Financial Accounting Concepts No. 6, “Elements of Financial Statements” Current liabilities are: Obligations whose liquidation is reasonably expected to require the use of current assets or the creation of other current liabilities. Accounting Research Bulletin No. 43, “Restatement and Revision of Accounting Research Bulletins”. SFAS No.78 indicates that current liabilities should include obligations that are due on demand or that will become due on demand within one year from the balance sheet date. 2. Typical current liabilities Accounts payable, Notes payable, Current maturities of long-term debt, Short-term obligations expected to be refinanced, Dividends Payable, Returnable deposits, Unearned revenues, Sales taxes payable, Income taxes payable, Employee-related Liabilities a. Notes Payables (N/P) Notes Payables are written promises to pay a certain sum of money on a specified future date. Notes payable that arise from cash-borrowing activities are generally of two types: (1) Interest-bearing notes, and (2) Zero-interest-bearing...
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...What is a contingent liability? A contingent liability is a potential liability…it depends on a future event occurring or not occurring. For example, if a parent guarantees a daughter’s first car loan, the parent has a contingent liability. If the daughter makes her car payments and pays off the loan, the parent will have no liability. If the daughter fails to make the payments, the parent will have a liability. If a company is sued by a former employee for $500,000 for age discrimination, the company has a contingent liability. If the company is found guilty, it will have a liability. However, if the company is not found guilty, the company will not have an actual liability. In accounting, a contingent liability and the related contingent loss are recorded with a journal entry only if the contingency is both probable and the amount can be estimated. If a contingent liability is only possible (not probable), or if the amount cannot be estimated, a journal entry is not required. However, a disclosure is required. When a contingent liability is remote (such as a nuisance suit), then neither a journal nor a disclosure is required. A product warranty is often cited as a contingent liability that is both probable and can be estimated. What is the difference between a contingent liability and an estimated liability? A contingent liability is a potential liability (and a potential loss). It is dependent upon a future event occurring or not occurring. For instance...
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...Liabilities The role of a liability and what it means to the business as a whole is different for every business. What remains the same is the definition. A liability is a company’s legal debts or obligations that arise during the course of business operations and is recorded on the balance sheet. Liabilities can include many things to a business, such as, loans, accounts payable, mortgages, accrued expenses, etc. All the named liability accounts are just fancy for any money or service that is owed to another party. There are two types of liabilities, current liability and long term liability. Current liability is debt payable within one year and long-term liability is debt payable over more than a year. Current liability includes payables such as wages, accounts, taxes, and accounts payable. Long term liability includes long term bonds, notes payables, and long term leases. It is important that every business knows the concept of extinguishing liabilities. To extinguish liabilities means to satisfy the obligation and or payment to the creditor. Another way to extinguish liabilities is to transfer assets. This idea of extinguishing liabilities is meant for use by the SEC. There are many different industries that consider industry guidance in the FASB, Financial Accounting Standards Board, Codification and they include agriculture, contractors, entertainment, financial services and health care entities. The agriculture industry has many different characteristics represented...
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...ASSETS & LIABILITIES Asset is an item of value owned by the company. Assets can be tangible i.e. those which have some physical existence or can be intangible i.e. which do not exist in physical form but can be held in the form of contracts or rights. Assets are usually grouped in order of liquidity (ease of conversion to cash) on the balance sheet. Cash is therefore the most liquid of all assets. Assets can be classified as: 1.) Current Assets – Those assets that are expected to be converted to cash in 12 months or less. This can be in the form of cash, accounts receivables, inventory for producing goods etc. 2.) Investments – These are the investments which the company make in other companies in the form of equity purchase, bonds etc. 3.) Fixed Assets – A fixed asset is one that is held for the purpose of producing or supplying goods or services and not for sale in the normal course of business. They are also referred to as long lived/ long term assets and are sub-classified as following: a. Property, Plant & Equipment – These are tangible items having physical existence and can be seen and felt. b. Intangible Assets – They have no physical existence and rather represent legal rights with associated economic benefits. c. Natural Resources – These include oil, natural gas, minerals and forests. Liability is something which a company owns to people or businesses other than its owners. Liability is a present obligation arising due to...
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...ACCT 2015 INTERMEDIATE FNANCIAL ACCOUNTING 11 Current Liabilities, Contingencies & Provisions Required Reading: Alfredson – Chap 5, Keiso – Chaps 13, IAS 37 Learning Objectives 1. CURRENT LIABILITIES: – Define and explain types of current liabilities. – Account for the major types 2. IAS 37 PROVISIONS & CONTINGENCIES – Define Provisions and answer the following questions: • • • Why do them When to provide How much to provide – Calculate and account for Restructuring Provisions – Define Contingent Assets & Liabilities and apply relevant measurement and recognition rules – Apply IAS 37 Disclosure Requirements CURRENT LIABILITIES LIABILITY – Claims against the business arising out of a past transaction that will cause an outflow of resources e.g. loans, notes payable • Long-Term Liability - Obligations that a company does not reasonably expect to liquidate within the normal operating cycle Current Liability - Obligations that a company reasonably expects to liquidate either through the use of current assets or the creation of other current liabilities. • 1 CURRENT LIABILITIES E13-2 (Accounts and Notes Payable) The following are selected 2007 transactions of Sean Astin Corporation. Sept. 1 - Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system. Oct. 1 - Issued a $50,000, 12-month, 8% note to Encino in payment of account. Oct. 1 - Borrowed $50,000 from the Shore Bank by signing...
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...Running Head: Products Liability Assignment 4: Products Liability Name Law and Ethics in the Business Environment Professor February 17, 2013 Products Liability Johnson & Johnson Johnson & Johnson started out making surgical dressing for hospitals and then that progressed into what Johnson & Johnson is best known for is the Band-Aid brand band aid. They added tape to the dressing and the product was convenient for hospitals as well as mending cuts and scrapes that people get, targeting kids because they are accident prone. In later years Johnson & Johnson explored other opportunities mainly in the over-the-counter medicinal products. Over the years they have been subject to many lawsuits but the one this paper will focus on is the product liability lawsuit on the DePuy ASR hip implant. DePuy is a company that specializes in orthopedic products and was acquired by Johnson & Johnson in 1998. The metal on metal hip replacement DePuy ASR was approved by the FDA for use by surgeons on patients that were in need of a hip replacement in 2005. (Meier, 2010). The DePuy ASR hip replacement should have a life of at least 10 years. The device was being used on patients, soon after the DePuy dividion of Johnson & Johnson started receiving complaints of the device with the largest spike of complaints in 2009. (Meier, 2010). Many of the complaints resulted in the patient having to receive another hip replacement only a few years...
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...Vicarious liability Vicarious liability is the principle of law that holds one party liable for the acts or negligence of another party. (Susan W Killion, 2006) It is provided that the third parties such as members of the group, subcontractors, agents, franchisee, clients and customers, are deemed to be under the control of the employer. (David A. Beyer, 2006) It is also known as the legal liability and responsibility attached to the shoulder of the employer if his employee committed wrongful act within the course, scope or terms of their employment due to the authority delegate to him by the employer. (Ibrahim, 2012)This may include bullying and harassment, violent or discriminatory acts and breach of copyright. (Dale, 2005) In vicarious liability, the key question is the difficulty in determining whether the employee was acting in personal capacity or in the course of their employment. The knowledge of the employer is irrelevant on the wrongdoing. Though, the employer could take reasonable steps to prevent such acts from occurring and take remedial and corrective measures. For example, policies and standards could be prosecuted and training could be provided. Employer also may claim the right to a limited indemnity from the employee if the employer is vicariously liable for the tort of an employee under common law. However, this could not apply to the employer when he required the employee to do something illegal.(Queensland Law Reform Commission, December 2001) Cyber-liability ...
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...submitted to prof. manjula batra | LAW OF TORTS PROJECT | VICARIOUS LIABILITY | | | SUBMITTED BY:VAIBHAV PRATAP SINGHFIRST SEMEMSTER, 2012BA., LL.B. (HONS.) | | ACKNOWLEDGEMENT I would take this opportunity to thank the people who helped me in making this project which has been a learning experience. In that endeavour, first and foremost I would express my gratitude toward my professor of Law of Torts Ms Manjula Batra. Her immense knowledge and teaching skills along with her helping disposition are where all of this stemmed from. Next, I would thank my seniors in the faculty who gave us guidelines as to how to go about the research. These are the people who were always there with me in the making of this project. Heartfelt thanks to all the above-mentioned people. INDEX OF AUTHORITIES Books and Journals referred: 1. Salmond, Torts, 18th Ed 2. HOLMES Common Law, pp. 179 (180) 3. The Law of Torts by Ratanlal and Dhirajlal 4. Law of Torts by Dr R. K. Bangia 5. Law of Torts by B.M.Gandhi Websites referred: 1. www.legalserviceindia.com Cases: 1. Brook v. Hook (1871) LR 6 Ex 89 2. Keighly Maxsted & Co. v. Durant (1901) AC 240 p.260 : 84 LT 777 (HL) 3. PER LOCH, J., in Rani Shamasundari Debi v. Dukhu Mandal (1869) 2 Beng LR (AACJ) 227 (229) 4. Bird v. Brown (1850) 4 Ex 786 (799); Buron v. Denman (1848) 2 Ex 167 5. Baxi Amrik Singh v. The Union of India (1973) 75 P.L.R. 1 at p.7 6. Imperical Chemical Industries...
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...through an engagement letter, and use engagement letters to minimize the risk they assume under the contract. Many engagement letters include memos limiting the recovery. (Reinstein, Lobingier, & Green, 2009) Accountants expressly agree to do a project by a specific date, and imply that the work will be completed carefully. If an accountant breaches the contract, they can be found liable for damages. If it can be found that an accountant did not act with skill and competence, causing harm to their client, negligence can be proved. Accountants also may be found guilty of fraud. Fraud can be proved if an accountant makes a false statement, knowing it is false, and the client relies on the information, resulting in damages. Another liability to the client is the trust clients give their accountants. They are liable to keep the information confidential and to use it only for the client’s benefit. (Beatty, Samuelson, & Bredeson, 2013, pp. 432-434) As defined in Sec. ET-501 of the AICPA Professional Standards, accountants in public practice will not disclose any confidential client information without the specific consent of the client. (Cashell & Fuerman, 1995) It is the accountant’s responsibility to be diligent...
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...College of Law 1-1-1987 Strict Liability for Chattel Leasing Richard C. Ausness University of Kentucky College of Law, rausness@uky.edu Recommended Citation Richard C. Ausness, Strict Liability for Chattel Leasing, 48 U. Pitt. L. Rev. 273 (1987). This Article is brought to you for free and open access by the College of Law at UKnowledge. It has been accepted for inclusion in Faculty Publications by an authorized administrator of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu. ARTICLES S TRICT LIABILITY F OR C HATTEL L EASINGt R ichard C. Ausness* Leasing has become an increasingly popular substitute f or outright purchases as a means o f acquiring products f or use. Few courts a nd commentators, however, have addressed the question o f whether the principles o f strict products liability which apply to sellers also apply to lessors. I n this Article, Professor Ausness reviews the historical basisfor imposing strict liability in tort on sellers a nd applies these rationales to five basic kinds o f lease transactions. H e concludes that strict liability should not apply when a product defect arises after the leased product is placed in the hands o f the lessee (as contrasted with the more typical case o f " manufacturing defects" which arise when the product is manufactured), nor when the leased product is a fixture attached to real property. I n such cases, the lessor should be held to a negligence standard o f liability. However, in a ll other cases...
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...CA 14-4 Project purpose financing arrangements are that in which a main company create special purpose entity with a purpose to build a plant and not to report the plant or the borrowing used to fund the construction on its balance sheet. Take or pay contract is an agreement between a purchaser of goods signs with the seller to pay specified amounts periodically in return for products or services. The purchaser must make specified minimum payments even if delivery of the contracted products or services is not taken as a main company promises that it will buy all the product produced by the plant. Ryan should not record the asset as he has Take or Pay contract with Aluminum Can Company and Aluminum Can Company has taken the operation to construct and operation the plant. Off balance sheet financing is form of financing to borrow money in a way to prevent recording of the obligations. Coca Cola V/s Pepsi Co, Inc (2009) Debt to Total Asset Ratio: Coca Cola=23325/48671 = 47.8% Pepsi Co, =22406/39848= 56 % b ) (2009 )Time Interest earned ratio: Coca Cola=6824+2040+355/355=25.96 times Pepsi Co =5979+2100+397/397=21.35 times The debt to total assets ratios of 48 % of Coca-Cola and 56% of PepsiCo show Pepsi co to be highly leveraged, PepsiCo more than Coca-Cola. The times interest earned ratios of Coca Cola show that show that interest expense is quite adequately covered...
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...VICARIOUS LIABILITY Words 1055 1) Vicarious liability is a legal tort doctrine that assigns responsibility upon one person for the failure of another, with whom the person has a special relationship (such as employer and employee or owner of vehicle and driver), to exercise such care as any reasonable prudent person would use under similar circumstances. In other words, it imposes strict liability on employers for the wrongdoings of their employees, who have acted negligently. 2) The elements of the doctrine include that: the person who commits the wrong must be an employee, the employee must have committed a tort and it must have been committed in the course of employment. In regards to the first requirement for imposing VL, the rule is that an employer can only be liable for torts committed by employees. There is generally no liability for torts committed by independent contractors (although there can be in certain exceptional situations). However, it is not always possible to determine at first sight whether in fact a person is employed under a contract of service or not. It will often be in the interest of an ‘employer’ to deny that the relationship is one of employment. It has been suggested in WHPT Housing Association Ltd v. Secretary of State for Social Services that the distinction lies in the fact that the employee provides himself to serve while the self- employed person only offers his services. 6) Once it has been established that sufficient relationship...
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...Liability and Accountability Canesha Abdulahi AIU Online BUSN150-1302A-04 May 12, 2013 Abstract This paper will carry on a discussion about what is different and similar when it comes to the four ways invasion of one’s privacy can be seen as. It will also go over the definitions of and similarities between the Lemon Law, General Warranties, and the Magnuson-Moss Warranty Act. Lastly there will be a discussion of the dangers of defective products on the public and legal system. Introduction It is a fact that all individual are held accountable for his or her own actions. There are many cases where individuals invade other’s privacy causing harm to that person. There are some cases in which an individual purchases a product that has defects and the manufacturer or seller does not take the steps needed to repair or replace the product. When products have defects there are can be many dangers that are posed to the public and the legal system. It is imperative that each and every person be held responsible for his or her actions. Invasion of Privacy-Similarities Each type of invasion of privacy involves someone making information about another person public without permission. The information that is made public is done so in a manner that is very offensive and harmful to any reasonable person. All of these types of invasions are intrusive acts that interfere with an individual’s right to privacy. Invasion of Privacy-Differences Invasions of solitude/seclusion can...
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...facility, which is 150 miles from the dealership. AAA Auto Dealers provides John with a dealer car to drive, as well as reimburses him for gasoline, food, and lodging. While driving to the manufacturing plant, John, accompanied by his boss, decided to stop by John’s cousin’s house for dinner. While on the way to his cousin’s house, John collided with a motorcyclist, injuring the driver. ISSUE: Whether AAA Auto Dealers are liable for John’s negligence? RULE: AAA Auto Dealer’s may be held vicariously liable for its employee's actions under the theory of respondeat superior for negligence committed within the scope of employment, citing Stropes v. Heritage Children's Ctr., 547 N.E.2d 244, 247 (Ind. 1989). ANALYSIS: Vicarious Liability imposes responsibility on one person for the acts of another because of a special relationship with that person; such as a parent or employer. Okrent, C., & J.D.. (2009). Respondeat Superior places responsibility on the employer for any acts or harm caused by its employees while working. Okrent, C., & J.D.. (2009). If an employee’s acts were authorized, then the respondeat superior rule applies. In Barnett v. Clark, Debra A. Barnett sought damages against Camille Clark, Trustee of Pleasant Township in Steuben County, Indiana for the acts committed by a Trustee employee. Barnett suffered rape, sexual battery, and false imprisonment by Donald Clark, a deputy trustee, when seeking assistance from the Trustee’s office. The Indiana...
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...The Strict Liability Theory Introduction Strict Liability in simplistic terms can imply an individual or company being liable for their deeds, conducts and outcomes that result in damages to others. A personal complaint of injury for a strict liability case is not as a consequence of a foreplanned action or careless deed (Boatright, 2012). The respondent's action should have triggered strict liability and that the complainant suffered harm. In fact, one cannot understand what strict liability in the criminal law means, in the same token understand why it is considered unorthodox and morally dyslogistic. The respondent's responsibility and blameworthiness, or mental fault should be evaluated and, more particularly, the usual relevance of a respondent's mistakes in determining this error. Furthermore, strict liability is a form of responsibility that may occur in either a criminal or a civil context. Equally important to note, strict liability causes an individual to legally answerable for the loss and damage that his or her actions caused because of his or her deeds of omissions irrespective of incrimination. For strict liability to be induced and used in a lawsuit, proving fault or negligence is not the main desire but rather showing the danger to the complainant (Martin, 2014). Strict liability flows not from carelessness, but from the v option to conduct the activity at all. Strict liability does not base on a fault in the time-honored sense of the term, but on the policy...
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