AS 29 - 14(b)

For a liability to qualify for recognition there must be not only a present obligation but also the probability of an outflow of resources embodying economic benefits to settle that obligation. This means that the settlement of a liability should result in an outflow of resources that embody economic benefits i.e. the involvement of cash or cash equivalents used for payment . It could also involve the transfer of other assets. A liability is measured by the value of these resources that will be paid or transferred. Cash / asset transferred are resources embodying economic benefits

Sudha Reddy

CA Final

★ 20K+

28-Jul-21 14:50

It means outflow of resources and benefits which are to be received through that resources Ex: for example an asset producing 2000 units when it sold are disposed along with asset we will loose that production also

Deepak Sai avinash Darisi

CA Final

★ 90

28-Jul-21 09:02