Topic: Provisions and contingent liabilities Level of difficulty: High Haeffner PLC is an accounting firm. Some of its clients face the following situations. For each, it is assumed that a reliable estimate can be made of any outflows expected:
1 Acme Manufacturing Enterprises Ltd. (AME) provides a warranty on its products at the time of sale. Under the terms of the warranty contract, AME undertakes to make good, by repair or replacement, any manufacturing defect that becomes apparent within three years from the date of sale. Based on past experience, it is probable that there will be some claims under the warranties.
2 Stone Oil Industries Co. (SOI) has been a medium-size oil producer and refiner for the past 50 years. It operates in many parts of the world. On occasions, SOI units have incurred spills of crude or refined products that have contaminated land and water. It is SOI’s management philosophy that clean-up should be organized only when the firm is required to do so under the laws of the country in which the spill took place. One country in which SOI operates has, until now, not had any legislation requiring cleaning-up. SOI has been contaminating land and water in that country for several years without taking any corrective action. On 31 December X1 it becomes virtually certain that a draft law mandating retroactive cleaning-up of land and waterways already contaminated will be enacted shortly after the year-end.
3 Sudstrom AB is a large upscale retail store established in most major consumer market areas. It has built its reputation on selection and quality of its products and on a well-advertised policy of refunding purchases to dissatisfied customers without asking any question as long as Sudstrom carries the product, even in cases where the store may not be under any legal obligation to do so.
4 On 18 December X1, the board of Zygafuss Agglomerated Enterprises Co. (ZAE) decided to close down one of its industrial divisions. By closing date (31 December) the decision had not yet been communicated to any of those affected (not even to the Works Council), and no other steps had been taken to implement the decision.
5 During X1 Mutter GmbH had provided a loan guarantee for the benefit of Scout AG, a trading partner (in which Mutter does not hold any share interest) opening the market for Mutter products in Transmoldavia (a fictitious country). Scout’s financial condition at that time is considered to be sound and its economic prospects bright. Bankers have, however, requested a loan guarantee because of the short history of Scout in this market and the possible instability of the Transmoldavian market. During X2 the market in Transmoldavia experiences a serious economic downturn and Scout’s financial condition deteriorates. On 30 June X2 Scout AG actually files for protection from its creditors.
Analyze each of these five situations and make a recommendation for each as to the necessity of recording (and reporting) or not an appropriate provision.
Exemplary Academic Writing Service
At TheQuizlet.com, you are guaranteed of quality service from our professional writers. We maintain consistent communication with customers after placing an order to avoid missing anything that may compromise the quality of delivered work.
Our hiring process is rigorous to maintain the desired quality that has become the core of our business. We expose potential writers to an uncompromising selection process that enables TheQuizlet to pick the best out of the rest. TheQuizlet boasts of a competent team of writers, editors, and professors who work towards accomplishing your goals.
TheQuizlet has an in-house plagiarism software that lowers the probability of delivering plagiarized papers to our clients. Referencing is guided by the format specified by a customer when placing an order. Our writers are conversant with all referencing formats that include APA, MLA, Chicago, Harvard, and Vancouver among others.
24/7 Customer Support
We understand the importance of effective communication and as such, TheQuizlet has a dedicated customer support department that responds to all client needs. You can easily contact our team through a chat window at the bottom left corner. Additionally, clients can reach us through support’s email or a telephone number available on our contact page. Feel free to contact us at any time and our team of experts will solve all your problems.
Swift Delivery and 100% Money-back Guarantee
When placing an order, ensure that you specify the correct deadline to help our writers work around the provided timeline. At TheQuizlet, we deliver our tasks before the projected deadline to give time for the customer to proofread the work before submission. In the event we cannot deliver a paper on time, we initiate contact with the client to renegotiate a new deadline.
Unlimited and Free Revisions
We urge all our customers to request for a revision whenever they identify a need to amend the paper. Since we understand your concerns, TheQuizlet.com does not charge for revisions. Nonetheless, we encourage customers to be genuine when requesting for revisions.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
TheQuizlet is a one-stop shop for all your writing needs. We tackle each customer’s needs differently to improve the quality of outcomes and meet your expectations.
TheQuizlet is committed to delivering quality work on time to ensure our clients get the value for their money.
Admission Essays and Professional Writing
Admission essays are personal, as opposed to other papers. For this reason, our team will request for any information that will enable them to deliver quality work, which allows you to convince the admissions board on why you should be granted the application.
Editing and Proofreading
Our team comprises of qualified researchers, writers, and editors who go through the different papers before delivering them to our clients. Whether your paper is being written from scratch or you want it to be edited, you can trust TheQuizlet for all your needs.
After receiving the final draft, you can request for a revision to incorporate various changes that are aligned with your expectations. All our papers are written in line with the latest writing standards.