D4. Note 31.3 lists a number of contingent liabilities. Are amounts for those it
ID: 2462834 • Letter: D
Question
D4. Note 31.3 lists a number of contingent liabilities. Are amounts for those items recognized as a liability on AF's balance sheet? Explain.
D5. Sealy Corporation reported the following line items in its statement of cash flows:
Amortization of discount on secured notes …………………….382,000
Amortization of debt issuance cost and other……………....... 1,175,000
In AF's financial statements, Note 32: “Financial Debt” describes the company's long-term debt. Neither of the two items above is reported in the financial statements of Air France, and neither is likely to appear there in the future. Why?
D6. Examine the long-term borrowings in AF's balance sheet and the related note. Note that AF has convertible bonds outstanding that it issued in 2005. Prepare the journal entry AF would use to record the issue of convertible bonds. Prepare the
Financial Roport 5.5.3 Consolidated balance sheet December 31, 2013 December 31, 2012January 1 January 1,2012 Pro ,2012 Pro forma 17 Goodw intangibie asoets Fight equpment Other proporty plant and equipment nvestments in equity associatoo Penision assets Other financial assets" Deterred tax assets Othor non-curiont assets Total non-current assets Assets held for sale Other short-term fnancial assets" 842 10,048 1,932 381 2.477 1,665 1.392 152 19,141 896 9.391 1,819 18 10 20 2,454 1,963 2.336 2015 1 322 168 13.4 113 17, 486 91 ,031 511 1,775 23 15 24 25 933 521 1,859 751 Trade accounts recoivablos Income tax receivables Other current assets Cash and cash equvalenns Total current assets Total assets 27 3,684 7,937 25,423 3,420 7,579 26,720 2.283 6.408 26,615 Decenbe 31, 2013 Decenber 31, 2012 Jansary 1, 212 Deposts rolated to fnuncal dabts 006 957 The accompanying notes are an integral part of these consolidated fnancial statementsExplanation / Answer
contingent liabilities are not be considered as liability because A contingent liability is a potential obligation that may be incurred depending on the outcome of a future event. A contingent liability is one where the outcome of an existing situation is uncertain, and this uncertainty will be resolved by a future event. A contingent liability is recorded in the books of accounts only if thecontingency is probable and the amount of the liability can be estimated
d5. already mentioned items are placed in cash flow statement so what cash balance comes in is all after the adjustments ofthe said items that is the reason for nonshowing the item in balancesheet
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