Liability Recognition at Ansell Company
At Ansell Company, the liabilities are recognised immediately they arise and this is done at a cost, for example, the interest-bearing liabilities are typically recognized at their fair value and this less of the attributable transaction costs. Before the liabilities are recognised, they are often states at their amortised costs (Hougaz, 2015 p.140). The effective interest method is then used in recognition of the difference in the redemption value and the cost of the liability in the income statement.
According to Roberts (2015 p.37), the trade and other payables of the company are usually recognised ad settled within a period of 30 to 60 days. Such recognition is done from the date of the invoice, and it could also be based on the agreed terms of the transactions with a variety of suppliers of the company. The contingent liabilities are recognised in the company when the amount can be estimated reasonably and hence they are recorded in the various books of accounts.
Liability Recognition at Barrick Limited Company
According to Owen and Kemp (2014 p.15), the liabilities of the mining company are recognised based on the key definition of liability which is an obligation of the company which is typically due to the past events, and the settlement of such liabilities are from the resources of the company which embodies economic benefits. Additionally, there are several tests which the liability has to pass. For instance, the company acknowledges that it is its obligation to settle the liability when it arises. The company also uses the various factors such as nature of obligation, potential offsets of the liability, methods and amount of the liability and those factors which determines the timing of the various expenditures especially where there is uncertainty (Dobele, Westberg, Steel and Flowers, 2014 p.150).
At Barrick Company, the liabilities are recognised when the liabilities exist. The deferred tax liability, for instance, is usually recognised for a temporary difference, and this is usually between the tax base of the liability and the accounting carrying value. Also, the tax liability has to be recognised fully without leaving anything.
Further, in the circumstance where a particular liability meets the definition but fails to meet the recognition criteria, such liability will be categorized as a contingent liability. Such liability is not typically disclosed in the statement of financial position but instead in the notes to the financial statements.
Just like in Ansell Company, the interest-bearing liabilities are also recognized at their fair value and this less of the attributable transaction costs. Before such liabilities are recognised, they are often states at their amortised costs. The trade and other payables liabilities are recognised after every half of the fiscal year and this is unlike in Ansell Company which is done after 30-60 days. The details checked for recognition is usually the invoice which recognised from the date of issue to the supplier by the company.
The contingent liabilities are difficult to estimate reasonably and hence they are not recorded in the books of accounts. Such a liability is usually disclosed in the notes to the financial statements (Dobele et al.2014 p.150). For instance the various lawsuits regarding the company are recognised in the specific notes of the financial statements.
Dobele, A.R., Westberg, K., Steel, M. and Flowers, K., 2014. An examination of corporate social responsibility implementation and stakeholder engagement: A case study in the Australian mining industry. Business Strategy and the Environment, 23(3), pp.145-159.
Hougaz, L., 2015. The Families in the Case Studies and Their Business. In Entrepreneurs in Family Business Dynasties, pp.73-140
Owen, J.R. and Kemp, D., 2014. Mining and community relations: Mapping the internal dimensions of practice. The Extractive Industries and Society, 1(1), pp.12-19.
Roberts, P., 2015. Advanced manufacturing in Australia. Australasian Biotechnology, 25(3), p.37.