First, the obligation is the current obligation undertaken by the enterprise;
Second, the performance of this obligation is likely to lead to the outflow of economic benefits from the enterprise. Here, "very likely" means that the possibility of occurrence is "more than 50%, but less than or equal to 90%";
Third, the amount of the obligation can be measured reliably.
[Edit] Basic characteristics of estimated liabilities [1]
Liabilities refer to the current obligations formed by past transactions or events, and the fulfillment of this obligation is expected to lead to the outflow of economic benefits from the enterprise.
According to the definition of liabilities, liabilities can be divided into three categories according to the time and amount of performance of obligations: the first category is liabilities that enterprises can control the time and amount of performance of obligations, that is, deterministic liabilities; The second category is the liabilities that enterprises have risks in controlling the time and amount of fulfilling their obligations, that is, estimated liabilities; The third category is the liabilities that the enterprise can't completely control the time and amount of fulfilling its obligations, that is, contingent liabilities.
This shows that. Estimated liability is a kind of liability between definite liability and contingent liability, which has the following basic characteristics:
(1) Estimated liabilities are current obligations formed by past transactions or events of the enterprise, including legal obligations and constructive obligation.
② The result of estimated liabilities is risky, but it can be reasonably estimated. On the one hand, the result of expected liabilities is risky, which is similar to contingent liabilities and different from deterministic liabilities; On the other hand, the result of expected liabilities can be reasonably estimated, which is similar to deterministic liabilities and different from contingent liabilities.
[Edit] Information disclosure of estimated liabilities [1]
1.Quality requirements for information disclosure of estimated liabilities.
IASC's goal of financial reporting is clear: it requires providing high-quality, transparent and comparable information in accounting statements and other financial reports to help participants and other information users in the world capital market make economic decisions. Based on this view, the author believes that the information disclosure of estimated liabilities should meet the following quality requirements: (1) correlation. There are risks in the confirmation of the estimated debt amount. The greater the estimated debt amount, the greater the risk, the higher the correlation with the enterprise, and the greater the influence on the information users to make correct decisions. The disclosure of estimated liabilities information must meet the requirements of relevance. (2) comparability. Comparability requires that the same estimated liabilities be accounted for in the same way, and different estimated liabilities be accounted for in different ways.
Comparability cannot be confused with consistency, which emphasizes that the information compiled must be comparable with other companies' information.
(3) neutrality. The results of estimated liabilities are risky, information users have different preferences for risks, and there is information asymmetry between information providers and information users, which requires the disclosure of estimated liabilities to remain neutral.
(4) transparency. Transparency requires that the information disclosure of estimated liabilities must be clear and easy to understand, avoid ambiguity, and fully disclose the unfavorable and favorable factors, existing or possible risks that affect estimated liabilities.
(5) substance is more important than form. Estimated liabilities involve a lot of estimates and judgments, which contain many subjective factors, and different estimates and judgments have different results. The principle that substance is more important than form requires that estimated liabilities should not be accounted only according to the external manifestations of economic business, but should reflect its economic essence.
2. Information disclosure of estimated liabilities.
(1) On-balance-sheet disclosure of estimated liabilities. Estimated liabilities should be distinguished from other liabilities in the balance sheet and reflected separately. If an enterprise involves a number of estimated liabilities with different contents, it generally only needs to be reflected by the estimated liabilities in the balance sheet, and it should be combined with other expenses or expenses in the income statement. If the enterprise is basically sure to get compensation, these compensations should be deducted in advance when the expenses or expenses recognized due to the estimated liabilities are reflected in the income statement.
(2) Off-balance-sheet disclosure of estimated liabilities. Off-balance-sheet disclosure of estimated liabilities, that is, disclosure in the notes to accounting statements, should generally include the following contents: ① The nature and causes of estimated liabilities, and the expected time for the final outflow of economic benefits; (2) the method of confirming the estimated debt amount, and the uncertainty explanation about the estimated debt amount or time; ③ The amount of confirmed assets expected to be compensated; (Book value of estimated liabilities at the beginning and end of the period, estimated liabilities increased in the current period, estimated liabilities reversed in the current period, estimated liabilities incurred and written off in the current period.
[Edit] Measurement of Estimated Liabilities
The measurement of estimated liabilities includes initial measurement and subsequent measurement.
1. Initial measurement of estimated liabilities
The estimated liabilities shall be initially measured according to the best estimate of the expenditure required to fulfill the relevant current obligations.
The determination of the best estimate is considered in two situations:
First, if there is a continuous range of required expenditure, and the possibility of various results within this range is the same, the best estimate should be determined according to the middle value within this range, that is, the best estimate should be determined according to the average of the upper and lower limits of this range. Examinations serve you well.
Second, the best estimate should be determined according to the number of projects involved:
① If contingencies involve a single project, they shall be determined according to the most likely amount;
② If contingencies involve multiple projects, they shall be calculated and determined according to various possible results and relevant probabilities.
2. Subsequent measurement of estimated liabilities
An enterprise shall review the book value of the estimated liabilities on the balance sheet date. If there is conclusive evidence that the book value cannot truly reflect the current best estimate, the book value shall be adjusted according to the current best estimate. However, accounting errors shall be handled according to accounting policies, changes in accounting estimates and accounting error correction criteria.
[Edit] Main accounting treatment of estimated liabilities
1 The estimated liabilities arising from external guarantee, pending litigation and restructuring obligations confirmed by the enterprise according to the contingency criteria shall be debited to the "non-operating expenses" subject and credited to this subject (estimated guarantee loss, estimated pending litigation loss and estimated restructuring loss) according to the determined amount.
According to the contingency criteria, the estimated liabilities arising from product quality assurance shall be debited to the account of "sales expenses" and credited to this account (estimated loss of product quality assurance) according to the determined amount.
The estimated liabilities arising from abandonment obligations confirmed according to the fixed assets standards or oil and gas exploitation standards shall be debited to the subject of "fixed assets" or "oil and gas assets" and credited to this subject (estimated abandonment expenses) according to the determined amount. Within the service life of fixed assets or oil and gas assets, the interest expenses that should be borne in each period are calculated and determined according to the abandonment cost, and the "financial expenses" account is debited and credited to this account (estimated abandonment cost).
The estimated liabilities confirmed according to the criteria for business combination shall be debited to the relevant subjects and credited to the subjects according to the determined amount.
If it is stipulated in the investment contract or agreement that the investee has excessive losses and the investing enterprise needs to bear additional losses, the enterprise shall debit the account of "investment income" for the amount of losses still to be borne according to the provisions of the investment contract or agreement, and credit this account when the book value of the account of "long-term equity investment" and other long-term rights and interests that substantially constitute investment are all reduced to zero.
2. When the enterprise actually pays off the estimated liabilities, it shall debit this account and credit "bank deposit" and other subjects.
3. If the enterprise needs to adjust the confirmed estimated liabilities according to conclusive evidence, it will adjust the increased estimated liabilities, debit the relevant subjects and credit the subjects; Adjust the reduced estimated liabilities and make the opposite accounting entries.
Accounting errors shall be handled according to accounting policies, changes in accounting estimates and accounting error criteria.
[Edit] Accounting Treatment of Current Estimated Liabilities
The difference between the loss confirmed due to the provision of estimated liabilities and the part that can be deducted from the taxable income when it actually occurs according to the provisions of the tax law shall be regarded as the deductible timing difference. If the accrued estimated liabilities actually suffer losses in the next accounting period, according to the accounting system and relevant standards, the actual losses should be offset against the accrued estimated liabilities, and the part of the estimated liabilities that is insufficient to be offset or the part of the accrued estimated liabilities that is greater than the actual losses should be directly included in the current profits and losses; If the accrued estimated liabilities are reversed in the next accounting period due to the elimination of various factors that originally caused losses, they will be included in the current profit and loss in accordance with the accounting system and relevant standards.
Example: On October 20th, 2004, Company A was involved in a lawsuit. On1February 3, 20041day, the court has not yet made a judgment. According to the professional judgment of the company's legal adviser, the possibility of the company losing the case is 60%. If the company loses the case, the company needs to pay 300,000 yuan. Assuming that the company's revenue in 2004 totaled 2 million yuan and its expenses totaled1million yuan (excluding the expenses involved in the estimated liabilities and no other adjustments), the income tax rate was 30%.
According to the current accounting system, enterprise A conducts accounting treatment: borrowing: non-operating expenses of 300,000 yuan; Loan: The estimated debt is 300,000 yuan. At the end of 2004, the income tax payable was calculated, and the accounting treatment was: debit: income tax 2 1 10,000 yuan, deferred tax 90,000 yuan; Loan: tax payable-income tax payable is 300,000 yuan. At the end of 2004, the net profit of enterprise A = 200-100-30-21= 49 (ten thousand yuan).
On April 3, 2005, if the court ruled that Company A lost the case, it would have to pay 300,000 yuan in compensation. Assume that the income and expenses of Company A in 2005 are the same as those in 2004. According to the current accounting system, enterprise A conducts accounting treatment: borrowing: the estimated debt is 300,000 yuan; Loan: 300,000 yuan in the bank. At the end of 2005, the income tax payable was calculated, and the accounting treatment was: debit: income tax of 300,000 yuan; Loan: Taxes payable-income tax payable is 2 1 10,000 yuan, and deferred tax is 90,000 yuan. At the end of 2005, the net profit of enterprise A =200- 100-30=70 (ten thousand yuan).
On April 3, 2005, if the court ruled that Company A won the case, the enterprise did not need to pay compensation. Assume that the income and expenses of Company A in 2005 are the same as those in 2004. According to the current accounting system, enterprise A conducts accounting treatment: borrowing: the estimated debt is 300,000 yuan; Loan: Non-operating expenditure is 300,000 yuan. At the end of 2005, the income tax payable is calculated, and the accounting treatment is: debit: income tax of 390,000 yuan; Loan: Taxes payable-income tax payable is 300,000 yuan and deferred tax is 90,000 yuan. At the end of 2005, the net profit of enterprise A = 200-100+30-39 = 91(ten thousand yuan).
[Editor] Discussion on the Accounting Treatment of Current Estimated Liabilities
In the business in which the estimated liabilities are reversed, the two-year net profit of enterprise A is1400,000 yuan (49+ 9 1) according to the Accounting System for Business Enterprises and the standards, which is the same as the two-year net profit without considering the estimated liabilities1400,000 yuan [(200-100)]. However, careful analysis shows that the net profit of enterprise A in 2005 increased by 2 1 10,000 yuan (9 1-70). The author thinks that the reversed estimated liabilities of an enterprise should be handled according to the accrual principle. The estimated liabilities are essentially a provision for impairment of the total assets of the enterprise, which will affect the profit and loss of the year when the estimated liabilities are withdrawn, so it should be handled according to major accounting errors.
The accounting treatment of the estimated liabilities withdrawn from the previous year is: borrowing: the estimated liabilities are 300,000 yuan; Loan: profit distribution-undistributed profit 2 1 10,000 yuan, deferred tax 90,000 yuan. This only adjusts the net profit of the previous period, and offsets the "deferred tax" item, which will not affect the current profit of reversing the estimated liabilities. At the end of 2005, the income tax payable is calculated, and the accounting treatment is: borrowing: income tax of 300,000 yuan; Loan: tax payable-income tax payable is 300,000 yuan. At the end of 2005, the net profit of enterprise A = 200-100-30 = 70 (ten thousand yuan).
In the second year, if it is confirmed that the estimated liability actually occurred, it can be handled according to the provisions of the current accounting standards for enterprises. However, when the estimated liabilities are confirmed, if it is found that the estimated liabilities were accrued more or less in the previous year, only the profit of the previous year and the "deferred tax" should be adjusted according to the accrual principle, and the current profit should not be affected.
On April 3, 2005, if the court made a judgment, Company A lost the case and had to pay 400,000 yuan in compensation. It is assumed that the income and expenses of Company A in 2005 are the same as those in 2004. When enterprise A confirms the estimated liabilities, the accounting treatment is as follows: borrowing: estimated liabilities of 300,000 yuan, profit distribution-undistributed profits of 70,000 yuan, deferred taxes of 30,000 yuan; Loan: 400,000 yuan in bank deposit. At the end of 2005, the income tax payable is calculated, and the accounting entries are: debit: income tax of 300,000 yuan; Loan: tax payable-income tax payable180,000 yuan [(200- 100-40)×30%], deferred tax120,000 yuan.
On April 3, 2005, if the court ruled that Company A lost the case, it had to pay 200,000 yuan in compensation. It is assumed that the income and expenses of Company A in 2005 are the same as those in 2004. When enterprise A confirms the estimated liabilities, the accounting treatment is as follows: borrowing: the estimated liabilities are 300,000 yuan; Loan: 200,000 yuan in bank deposit, profit distribution-70,000 yuan in undistributed profit and 30,000 yuan in deferred tax. At the end of 2005, the income tax payable is calculated, and the accounting entries are: debit: income tax of 300,000 yuan; Loan: Taxes payable-income tax payable is 240,000 yuan [(200- 100-20)×30%], and deferred tax is 60,000 yuan.
All the above treatments only adjust the net profit and deferred tax amount of the previous year, and do not affect the current profit and loss. However, the confirmation of the estimated liabilities enables the enterprise to enjoy the right to deduct "deferred tax" when paying income tax, that is, the enterprise can deduct the income tax overpaid in the previous period.
[Edit] The difference between estimated liabilities and contingent liabilities [2]
First, the conceptual differences
Contingent liabilities are latent obligations that describe past transactions and events, and their existence must be confirmed by the occurrence and non-occurrence of uncertain events in the future; Or the current obligation formed by past transactions and events, and the performance of this obligation is not likely to lead to the outflow of economic benefits from the enterprise or the amount of this obligation cannot be reliably measured. The cause of contingent liabilities is contingent events that may occur in the future, and it is the embodiment of the principle of conservatism to predict and determine contingent liabilities in accounting. At present, the common contingencies mainly include the following: pending litigation, tax disputes, credit guarantee responsibility, product guarantee debt and offering gifts to customers, discount of bills receivable, accounts receivable offset, etc.
Estimated liabilities refer to realistic obligations with uncertain time or amount that meet the conditions of liability recognition due to contingencies. The estimated liabilities have the following characteristics: ① The amount of the obligation can be measured reliably. Although the estimated liabilities are uncertain in amount, they can be reasonably estimated. Therefore, the estimated liabilities can be recognized in the financial statements. (2) This obligation is a realistic obligation undertaken by the enterprise. (3) the obligation to travel is likely to lead to economic benefits flowing out of the enterprise.
Therefore, the main differences between contingent liabilities and estimated liabilities are as follows: first, the estimated liabilities are a kind of liabilities, but only the actual obligations meet the definition of liabilities; Second, the estimated liabilities can be recognized in the statements, but the contingent liabilities do not meet the definition of liabilities and cannot be recognized in the statements.
Second, the difference between confirmation and measurement
1. Recognition and measurement of contingent liabilities There are the following conditions for recognizing contingent events as liabilities: ① There are signs before the financial statements are issued that a liability is likely to occur in the near future. ② The amount of this liability can be reasonably estimated, and the contingent amount recognized as a liability should reflect the principle of accounting conservatism. This amount is the best estimate of the expenditure required to pay off this liability, which is divided into two situations: (1) If there is an amount range for the required expenditure, the best estimate should be determined by the average of the upper and lower limits of this range; (2) If the required expenditure does not exist in an amount range, the best estimate should be handled according to different situations: ① When contingencies involve a single project, the best estimate is determined according to the most probable amount; ② When contingencies involve multiple projects, the best estimate is calculated and determined according to the most probable amount and its occurrence probability. Only when these two criteria are met at the same time can they be called contingent liabilities. Some contingencies, such as contingent assets and contingent profits, are different from contingent gambling debts, although they are related to contingent liabilities.
Article 13 of the Accounting Standards for Enterprises-Contingencies stipulates that an enterprise shall not recognize contingent assets.
2. Recognition and Measurement of Estimated Liabilities According to the Accounting Standards for Business Enterprises-Contingencies, if the following conditions are met, the enterprise shall recognize it as an estimated liability. This obligation is a realistic obligation undertaken by the enterprise, not a potential obligation. The so-called realistic obligation refers to the realistic legal obligation arising from past events, and the enterprise can only fulfill this obligation.
Fulfilling this obligation is likely to lead to the outflow of economic benefits of enterprises. That is, when fulfilling the realistic obligations related to contingencies, the possibility of economic benefits flowing out of the enterprise exceeds 50%, but it has not been basically determined. The possibility of economic benefits flowing out of the enterprise due to the performance of obligations related to contingencies is usually judged according to the following conditions: the probability interval corresponding to the possibility of results is basically determined to be greater than 95% and less than100%, probably greater than 50% and less than 95%, probably greater than 5% and less than or equal to 50%, and most likely greater than 0 and less than or equal to 5%. The fact that the enterprise has undertaken realistic obligations due to contingencies does not mean that the realistic obligations are likely to lead to economic benefits flowing out.
The amount of this obligation can be measured reliably. If the amount of the obligation cannot be measured reliably, even if the obligation meets the first two conditions, it cannot be recognized as a liability. In addition, if the contract to be executed becomes loss contract, and the obligations arising from the loss contract meet the conditions for recognizing contingencies, it shall be recognized as estimated liabilities; Enterprises should not confirm the estimated liabilities for future operating losses; If the restructuring obligations undertaken by the enterprise meet the conditions for confirmation of contingencies, they shall be recognized as estimated liabilities.
Third, the difference between statement disclosure
1. Contingent liabilities standards stipulate that contingent liabilities are not recognized as potential obligations or actual obligations, but should be disclosed in the notes to the statements. The basic principle of disclosure of contingent liabilities is that the contingent liabilities that are extremely unlikely to cause economic benefits to flow out of the enterprise are generally not disclosed. However, some contingent liabilities that often occur or have a great impact on the financial position and operating results of an enterprise should be disclosed even if it is unlikely that economic benefits will flow out of the enterprise, so as to ensure that users of accounting information can obtain sufficient and detailed information. The contents that should be disclosed for contingent liabilities include ① types of contingent liabilities, including discounted commercial acceptance bills; Pending litigation and arbitration; Contingent liabilities formed by providing debt guarantees for other units ② The expected financial impact; ③ Possibility of obtaining compensation. However, in the case of actual pending litigation and arbitration, it is not necessary for the enterprise to disclose all or part of the information according to the requirements of the standards, which is expected to have adverse effects on the enterprise. This standard stipulates that in this case, the enterprise shall at least disclose the reasons for the pending litigation and arbitration.
2. Estimated Liabilities "Accounting Standards for Business EnterprisesNo. 13-Contingencies" stipulates that the liabilities confirmed by contingencies should be reflected in a separate item in the balance sheet, and the corresponding disclosure should be made in the notes to the accounting statements, explaining the types of estimated liabilities, the reasons for their formation and the uncertainty of the outflow of economic benefits, reflecting the opening and closing balances of various estimated liabilities and the changes in the current period, while the expenses or expenses related to the confirmed liabilities should be deducted.
In short, contingent liabilities are only one kind of contingent realization provisions, which are uncertain. Only those that meet the requirements can be recognized as liabilities, and only those that are not recognized on the balance sheet date are disclosed. However, the estimated liabilities meet the requirements for the recognition of liabilities, which should be recognized and disclosed in accounting treatment.
[edit] references
1.Write1.01.1Chen Shaoyan. Talking about the estimated liabilities. Accounting Edition of Accounting Monthly. 2005 10
2 = Zhang Xiaomei. On the difference and connection between contingent liabilities and estimated liabilities. Southwestern University of Finance and Economics. Mass Commerce in the second half of 20 10/period.