MANAGEMENT

Detailed explanation-1: -An obligation is a liability to other arising from past transactions or events, the settlement of which is expected to result in the future sacrifice of economic benefits (i.e. cash payment or provision of service).

Detailed explanation-2: -According to IAS 32, a financial liability is considered as an obligation to deliver cash or assets to another firm, or to exchange assets or liabilities with another firm. Bonds payable, debt investments, equity investments and so on.

Detailed explanation-3: -Liabilities can be classified into three categories: current, non-current and contingent.

Detailed explanation-4: -On the company’s balance sheet, the company’s debtors are recorded as assets while the company’s creditors are recorded as liabilities.