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3 Analyzing Financing Activities
3 Analyzing Financing Activities
3 Analyzing Financing Activities
Current Liabilities
Current Liabilities are obligations whose liquidation requires the use of current assets or the
incurrence of another current liability for settlement වත්මන් වගකීම් යනු ඈවර කිරීම සඳහා වත්මන්
වත්කම් භාවිතා කිරීම හහෝ පියවීම සඳහා හවනත් වත්මන් වගකීමක් ඇතිවීම අවශ්ය වන බැඳීම් හේ.
The period over which companies expect to settle these liabilities is the longer of one year or
the operating cycle
Theoretically companies should record all liabilities at the present value of the cash outflow
required to liquidate them න්යායාත්මකව සමාගම් විසින් සියළුම වගකීම් ඈවර කිරීමට අවශ්ය මුදල්
පිටතට ගලා යාහම් වතතමාන වටිනාකමින් සටහන් කළ යුතුය
In practice current liabilities are recorded at their maturity value due to the short time period
until their liquidation ප්රාහයෝගිකව වත්මන් වගකීම්, ඒවාහේ ඈවර කිරීම දක්වා හකටි කාලසීමාව
හහ්තුහවන් ඒවාහේ පරිණත වටිනාකමින් වාතතා හේ
Current liabilities are of two general types
First type arises In practice current liabilities are recorded at their maturity value due to the short time
period until their liquidation
Second type arises from financing activities such as short-term loans and any current portion of long-
term debt
Non-Current Liabilities
Non-Current Liabilities are obligations not payable within the longer of one year or the operating cycle
They include loans from financial institutions such as banks, and more formal debt instruments such as
bonds, debentures, and notes
These obligations can assume various forms, and their assessment and measurement requires disclosure
of all conditions and covenants attached to them හමම බැඳීම් විවිධ ආකාරවලින් උපකල්පනය කළ හැකි
අතර, ඒවාහේ තක්හස්රුව සහ මැනීම සඳහා ඒවාට සම්බන්ධ සියලු හකාන්හේසි සහ ගිවිසුම් හහළිදරේ කිරීම අවශ්ය
හේ.
Since the liabilities are claims against a company’s assets and resources, the users need assurance that
companies account for all of them proper details as to their amounts and due dates, including
conditions, encumbrances, and limitations they impose on a company වගකීම් යනු සමාගමක වත්කම් සහ
සම්පත් වලට එහරහිව හිමිකම් පෑමක් වන බැවින්, සමාගමකට ඔවුන් විසින් පනවා ඇති හකාන්හේසි, බැරකම් සහ
සීමාවන් ඇතුළුව, ඒවාහේ ප්රමාණයන් සහ නියමිත දිනයන් පිළිබඳ නිසි විස්තර සමාගම් විසින් ගිණුම්ගත කරන
බවට පරිශීලකයින්ට සහතිකයක් අවශ්ය හේ.
Users must realize most companies continually look for ways to reduce the amount of liabilities
reported in their financial statements
They must also recognize that companies can misclassify or inadequately describe liabilities
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Auditors are one source of assurance in the identification of liabilities
Lease Obligations
Lease obligations are contractual agreements between a lessor and a lessee giving the lessee the
right to use assets owned by a lessor for the lease term in return for rental payments
Lease terms usually obligate a company to make a series of payments over a future period of time,
and in many cases these payments contain elements of interest and principal amortization
Lessee classifies and accounts for a lease as a capital Lease (recorded as an asset and associated
liability) if, at the inception of the lease, it meets one of four criteria:
(1) the lease transfers ownership of the property to the lessee by the end of the lease term,
(2) the lease contains an option to purchase the property at a bargain price,
(3) the lease term is equal to 75% or more of the estimated economic life of the property,
(4) the present value of the rentals and other minimum lease payments at the beginning of the lease
term equals 90% of the fair value of the leased property less any related investment tax credit
retained by the lessor
If the lease does not meet any of those criteria, the lessee classifies and accounts for it an operating
lease
Reporting requirements provide information for properly assessing the impact of leases for FSs and
evaluating their impact for financial position and results of operations වාතතා කිරීහම් අවශ්යතා FS සඳහා
කල්බදු වල බලපෑම නිසි හලස තක්හස්රු කිරීම සහ මූල්ය තත්ත්වය සහ හමහහයුම් ප්රතිඵල සඳහා ඒවාහේ බලපෑම
තක්හස්රු කිරීම සඳහා හතාරතුරු සපයයි.
Pension Liabilities
Users need to understand the nature of pension liabilities when an employer promises a pension. There
are 3 types of estimate:
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Vested benefit obligation – based on assumptions regarding workers’ current compensation
and for benefits vested to employees
Postretirement Obligations
Postretirement obligations are health care and other welfare benefits to retirees and designated
dependents
They include life insurance, medical care, housing assistance, legal and tax services, and eye and
dental care
Consequently ප්රතිඵලයක් වශහයන්, high performing markets can increase pension liabilities, or
make one appear where none existed
Analyst must exercise care in accepting management’s estimates on contingent liabilities (adequacy)
Commitments
Commitments are potential claims against a company’s resources due to future performance under
a contract
They are not recognized in accounting reports since signing of an executory contract or issuance of a
purchase order is not a completed transaction විධායක හකාන්ත්රාත්තුවක් අත්සන් කිරීම හහෝ මිලදී
ගැනීහම් ඇණවුමක් නිකුත් කිරීම සම්ුණත කරන ලද ගනුහදනුවක් හනාවන බැවින් ගිණුම් වාතතා වල ඒවා
හඳුනාහගන හනාමැත.
Commitments call for disclosure of important factors surrounding the obligation including its
amount, conditions, and timing
These items are often liabilities, but represent deferred income not yet earned
Deferred credits include a liability for future performance and often a potential profit component
(advances or billings on uncompleted contracts, unearned royalties and deposits, and customer
service prepayments)
Profits on installment sales are deferred not because they are unearned but because receivables
from these sales are collected over a future time period
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