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present value of liability

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › present value of liability

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  • August 16, 2021 at 7:44 pm #631776
    pano
    Member
    • Topics: 12
    • Replies: 4
    • ☆

    SINCE I AM STUDYING FINANCIAL REPORTING I HAVE LEARNED THE CALCULATIAON OF LONG TERM LIABIITY WE REPORTED AT PRESENT VALUE I HAVE LEARNED THE CALCULATION BUT I DID NOT UNDERSTAND THJE THE CONCEPT BEHIND THIS CALCULTION HOPE YOU WLL HELP ME

    August 19, 2021 at 10:07 pm #632266
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    It needs to be recognised at present value to reflect its worth in today’s monetary terms. The ultimate concept is taken from the management accounting side of the syllabus where we are dealing with the time value of money.

    Thanks

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