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Project in AC 204

Submitted by: Mary Fhey N. Ernesto Charlie Magne G. Santiaguel

Submitted to: Mr. Raphael Iuri B. Gervasio, CPA

LIABILITIES AND EQUITY LIABILITIES

CURRENT LIABILITIES (Presentation of Financial Statements) ACCOUNTS PAYABLE AND ACCRUED EXPENSES PAS 1, par. 69, provides that an entity shall classify a liability as current when: a. The entity expects to settle the liability within the operating cycle b. The entity holds the liability primarily for the purpose of trading. c. The liability is due to be settled within twelve months after the reporting period d. The entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. (Leases) PAS 17, par. 33, provides that lease payments under an operating lease shall be recognized as an expense on a straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users benefit. (Accounts Payable-Related Party Transactions) PAS 24, par.3 This standard requires disclosure of related party transactions and outstanding balances in the separate financial statements of a parent, venture or investor presented in accordance with IAs 27 Consolidated and Separate Financial Statements.

PAS 12 Current tax for the current and prior periods is recognized as a liability to the extent that it has not yet been settled, and as an asset to the extent that the amounts already paid exceeds the amount due. The benefit of a tax INCOME TAX PAYABLE loss which can be carried back to recover current tax of a prior period is recognized as an asset. Current tax assets and liabilities are measured at the amount expected to be paid to (recovered from) taxation authorities, using the rates/laws date. PAS 17, paragraph 50, provides that lease income DEPOSITS AND OTHER LIABILITIES from operating lease shall be that have been enacted or

substantively enacted by the balance sheet

recognized on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished PAS 1 A liability which is due to be settled

CURRENT PORTION OF LOANS PAYABLE

within twelve months after the reporting period is classified as current, even if: (a) the original term was for a period longer than twelve months; (b) an agreement to refinance or to reschedule payment on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue. PAS 1 Provides that an entity shall classify a liability as current when: (a) the entity

expects to settle the liability within the entitys operating cycle; (b) the entity holds the liability primarily for the purpose of trading; (c) the liability is due to be settled within twelve months after the reporting period; (d) the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. PFRS 9 A note payable not designated at fair value through profit or loss shall be measured initially at fair value minus transaction costs that are directly attributable to the issue of the note payable.

NON-CURRENT LIABILITIES PAS 1 The liabilities not recognized as LOANS PAYABLE NET OF CURRENT PORTION current as a residual definition shall be recognized as noncurrent liabilities. PAS 12, par. 24 A deferred tax liability shall be recognized for all taxable temporary differences. DEFERRED TAX LIABILITIES -NET PAS 12, par.70 An entity makes a distinction between current and noncurrent assets and liabilities; it shall not classify deferred tax assets as current assets and deferred tax liabilities as current liabilities.

PAS 17, par. 33, provides that lease payments DEPOSITS AND OTHER NONCURRENT LIABILITIES under an operating lease shall be recognized as an expense on a straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users benefit.

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