Which of the following is an example of a liability where there is no corresponding asset:
A) A provision for decommissioning.
B) A debenture issued by a listed company.
C) A loan owing to a financial institution.
D) A provision for warranties.

Question

Quizplus · Accepted Answer

A provision for decommissioning is a liability that arises when an entity has an obligation to remove plant or equipment at the end of its useful life. However, there is no corresponding asset as the plant or equipment has already been fully depreciated or written off. The other options (B, C, and D) all involve liabilities that are matched with corresponding assets.

Which of the Following Is an Example of a Liability