Which of the following is correct about a "liability" under IFRS Framework?
A)A future obligation arising from past events,the settlement of which is expected to result in an inflow of resources.
B)A present obligation arising from past events,the settlement of which is expected to result in an inflow of resources.
C)A past obligation arising from past events,the settlement of which is expected to result in an outflow of resources.
D)A present obligation arising from past events,the settlement of which is expected to result in an outflow of resources.

Question

Quizplus · Accepted Answer

A liability is a present obligation arising from past events, the settlement of which is expected to result in an outflow of resources. This definition is consistent with the IFRS Framework for financial reporting. Option A is incorrect because it mentions an inflow of resources, whereas liabilities are generally associated with outflows of resources. Option B is also incorrect because it mentions a present obligation resulting in an inflow of resources, which is inconsistent with the definition of a liability. Option C is incorrect because it mentions a past obligation, whereas a liability is a present obligation arising from past events.

Which of the Following Is Correct About a "Liability" Under