Determinable Current Liabilities Measurable with a fair degree of precision, and the amount and timing of cash outflows are reasonably certain. Preferred dividends in arrears are not a legal obligation until a distribution is formally authorized. Requires accrual of the pension cost over the years the employee provides services. Compensated absences Includes vacations, holidays, illnesses for which employees are normally paid. Charge warranty costs to operating expense in year of sale.
Sales warranty treatement - used when warranty is sold separately from the product.
Companies may note that they are contingent liabilities that are not reasonably estimable. Lack of insurance coverage - does not indicate that a liability has been incurred at the date of the financial statements. Generally the first classification in the liability and equity section of the balance sheet. Listed in order of maturity, according to amount or in order of liquidation preference. Areas warranting additional disclosure include assets pledged as collateral for secured liabilities purchase commitments short-term obligations expected to be refinanced loss contingencies for which a liability has not been recorded.