Constructive obligation

- Wala ka talagang utang pero ginusto mo na magkaroon ng utang tas umasa yung isang
tao
- Arises if these 2 are met:
1. Nag announce ka na magkakaroon ka ng utang
2. Yung tao na kausap mo/payee is umasa na yung sinabi mo ket gagawin mo
- Ex. Coca Cola states na may makukuha kang shirt if may nakuha kang certain na cup,
Bakit nung bumili ka ba ng coca cola ket required sila na bigyan ka ng shirt. NO. Pero
bat nagkakaroon ng utang sa part ni Coca cola? Kasi coca cola announced na
magbibigay sila ng shirt to increase their sales. So di sila required pero inubliga nila
yung sarili nila. Moreover, ikaw as customer ket umasa ka so if nakuha mo yung certain
cup, need nilang ibigay yung shirt.
- Ex. Declaration of dividends

Economic Resource

- Something of value
- It is an asset or a service

- MEASUREMENT:
 Conceptually, if liabilities lang ang sinabi sa tanong. Initially at present value then
subsequently at amortized cost
 Short/Long term and current/noncurrent liabilities are different.
Short term – within 12 months
Long term – more than 12 months
 Interest Bearing – sa contract mismo ket nakasulat yung interest

 Face Value – yung nakasulat sa papel/contract

 Classifications:
1. Short term – interest bearing – since magkahiwalay yung principal ang
interest sa contract, niliwanag mismo sa contract kaya irecord mo nalang
as face value
 2. Short term – non interest bearing
– materiality is the ability opf the information to affetc your decision. Baka
naman pag hiniwalay mo ket di ganun kalaki yung value (ex. 9,990
principal and 10 interest) so it won’t affect the decision of the company so
you can disregard
- Benefit over cost – baka mamaya nag hire ka ng accountant para
paghiwalayin yung principal and interest. 10 pesos lang yung interest
pero yung cost nung accountant is 500. So cost is higher than the benefit
3. Long term – interest bearing – same concept as short term interest
bearing
4. Long term – non interest bearing – lahat ng utang. May interest. So
you will assume that the principal wirtten in the contract is made up of
principal and interest. So need mo silang ipaghiwalay. Then, irecord mo
siya at the amount na principal)
Present value – the process of discounting na hinihiwalay mo yung
interest. Remember, interest is the function of time, therefore yung
matitira, yung amount na na hindi kasama yung time, so ang matitirang
value is known as present value since we removed the interest. (20
minutes)
Subsequent Measurement – Amortized Cost (process of bringing the
present value to it face value in the note)

- CURRENT LIABILITIES:
Pag pumasok yung utang sa kahit na anong criteria, current liability na siya
So, if it meet one criteria, it is alredy a current asset
 OPERATING CYCLE (Di ko masyadong gets – 30 minutes)
– ang isang business is may reason bakit binuo. Ang lahat ng ginagawa niya na
related sa business niya is called operation. (If yung utang is part ng operation na
yun, it is a current liability) (Gano kahaba yung operating cycle? Depende) (Ex.
Wine, may fermentation na mangyayari like 10 years tas saka ko lang ibebenta.)
- Example of an operating cycle: Umutang ka then bought inventory using the
money borrowed. Then makakatanggap ka ng A/R kasi nakabenta ka then later
on cash kasi naclaim mo na yung A/R. That cash will be paid to you’re A/P and
the remaining is the income. So, these is the whole operating cycle.
 PURPOSE FOR TRADING
- Nangutang ka, quoted debt instrument like bond (as if there is an active market
na always may bumibili and nagbebenta ng goods) Dahil pabago bago yung
price ng bond na yun, pwedeng magtake advantage dun sa changes. So 1,000
yung utang mo tas nakita mong bumababa yung value nung isa, so bibilhin mo,
tas later on pag tumaas na yung value, pwede mo ulit ibenta
 What if nontrade? Ex. Umutang ka sa banko, not for trading but for others.
Payable in 2 years siya so NON CURRENT SIYA kasi di siya related sa
operating.
- NONCURRENT LIABILITIES:
 A residual definition: Kung hindi siya current, then it is non current
- LONG TERM DEBT FALLING WITHIN ONE YEAR
  Pwedeng mareclassify – dating non current ket magiging current na (So dati ket
3 years siya pero nag fall within 1 year na, so current na siy)

 If you have an unconditional right to defer payment, then it is a non current

liability
 Payor has unconditional right pero iniisip niya na hindi na niya ieextend,
still, it is a noncurrent liability (Kahit isang araw nalang before bayaran, pwede
pa ring magbago isip ni payor tas iextend niya)
 Payee has the power to extend (so may extended right siya), currently, 1 year
from the payment date na yung utangtas iniisip ni payee na wag na kaya niyang
singilin, still current liability siya, irrespective sa iniisip ni payee. (Magiging
noncurrent lang if talagang totoo yung nangyaring extension, like nagkasundo na
si payor and payee, if iniisip lang ket disregard)
 KUNG INIISIP LANG NI PAYOR/PAYEE NA MAGEXTEND, DISREGARD
YUNG INIISIP NILA (as they may change their month)
 NOTE: The unconditional right must be on the part of the PAYOR, not the
PAYEE

- REFINANCING AGREEMENT
 May luma kang utang, nangutang ka ng bago, then yung pera sa bago ket
ibinayad mo sa luma
 ON or BEFORE = Noncurrent
 Date when the FS is authorized for issue
Date when the FS can already be shown to the intended users
What is the difference between the end of the accounting period (Dec. 31)
and FS are authorized for issue (March 31) is called SUBSEQUENT
EVENTS (52 minutes)

Adjusting event = current is gagawin mong noncurrent

Non adjusting events = kung current, current pa rin

So, may liab ka na magmamature ng 2022 and 2021 ngayon. If AFTER

the end of the reporting period. So that is what we call DISCLOSING
EVENT/NON ADJUSTING EVENT siya na madidisclose lang sa notes.

Kung kailan napag usapan yung extension or refinancing, dun siya

marereclassify as either NCL or CL

- COVENANT
 Pakikipagsundo sa creditor. So pauuutangin ka given na may certain restrictions.
DEFERRED REVENUE
- Remember the accrual principal, income is earned once the service is rendered,
regardless of when cash is collected.
- Deferred means delayed
- Deferred revenue is paid using services
- Initially, it is a liability, and once you’ve rendered your service, it will become a
revenue.

GIFT CERTIFICATE PAYABLE

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