Which of the following characteristic is required for a "liability" under IFRS Framework?
A)Expected to result in the inflow of economic benefits.
B)Expected to result in the inflow of economic benefits that are measurable.
C)Expected to result in the outflow of economic benefits.
D)Expected to result in the outflow of economic benefits that are virtually certain.

Question

Quizplus · Accepted Answer

A liability is defined as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of economic benefits. Thus, option C is the correct characteristic for a liability under the IFRS Framework. Option A and B are characteristics of assets, and option D is too strict as liabilities may still exist even if the outflow of economic benefits is not virtually certain.

Which of the Following Characteristic Is Required for a "Liability