A liability, to be reported on the statement of financial position, must have a fixed, known amount to be paid in the future.

Question

Quizplus · Accepted Answer

A liability can have an estimated or contingent amount to be paid in the future, and still be reported on the statement of financial position. Examples include estimated warranty claims and pending lawsuits with uncertain settlement amounts. However, the liability must be probable and the amount reasonably estimable for it to be reported on the statement of financial position.

A Liability, to Be Reported on the Statement of Financial