Vol. 3 LM2 Non-Current Liabilities Flashcards
Define
Non-Current Liabilities
Balance Sheet
All liabilties that are not classified as current are considered to be non-current or long-term.
Balance Sheet
Concept
Include loans (i.e., borrowings from banks) and notes or bonds payable (i.e., fixed-income securities issued to investors)
Balance Sheet
Long-term financial liabilities
Balance Sheet
reporting in financial statements
Liabilities such as loans payable and bonds payable
Balance Sheet
usually reported at amortized cost on the balance sheet
Balance Sheet
Reporting
If a company issues $10,000,000 of bonds at price of $97.50
Balance Sheet
- The bonds are reported at a liability of $9,750,000 at issue date.
- Over the bond’s life, the discount of $250,000 is amortized so that the bond will be reported as a liability of $10,000,000 at maturity.
Balance Sheet
Fill in the blank
____ result from temporary time differences between a company’s income as reported for tax purposes
Balance Sheet
Deferred tax liabilties
Balance Sheet
Fill in the blank
Deferred tax liability occurs when:
the tax basis is ____ than the book carrying value of a financial statement asset
Balance Sheet
less or lower
Balance Sheet
Fill in the blank
Deferred tax liability occurs when:
the tax basis is ____ than the book carrying value of a financial statement liability
Balance Sheet
greater
Balance Sheet
Define
Deferred tax liabilities
Balance Sheet
the amounts of income taxes payable in future periods in respect of taxable temporary differences.
* for example, when a company’s subsidiary has profits that have not yet been distributed, and thus, have not yet been taxed.
Balance Sheet
