financial liability

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May 5, 2020 at 1:00 pm #570025
toushiga
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Sir,for this technical article “https://www.accaglobal.com/ca/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/debt-equity.html”
“Economic necessity does not result in a financial liability being classified as a liability.”
1. What means of this sentence?
Thank you.
May 5, 2020 at 3:04 pm #570038
Stephen Widberg
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I think he means that it the business’s intentions to redeem or not redeem are irrelevant. What matters is whether the terms of the instrument could force them to redeem.
Best I can do on that one!
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