Current

Presentation of

LIABILITIES
PRESENTATION OF CURRENT LIABILITIES
Under paragraph 54 of PAS 1, statement of financial
position shall include these line items for CL:
a. Trade and other payables
b. Current provisions
c. Short-term borrowings
d. Current portion of a long-term debt
e. Current Tax Liability
What are included in trade & other payables?
The term trade and other payables includes:
a. Accounts Payable
b. Notes Payable
c. Accrued Interest on Note Payable
d. Dividends payable
e. Accrued expenses
Estimated Liability
- obligations which exist at the end of reporting period
although their amount is not definite.
- also, the date when the obligation is due is not also
definite in most cases
-although it has many loopholes, its existence is valid
and unquestioned.
EXAMPL
ES OF  Warranties

ESTIMA  Gift Certificates

 Bonus

TED  Award Points

 Premium

LIABILI
Deferred
revenue
 - aka unearned revenue

Deferred
- income already
received but not yet
earned

revenue - maybe a current or

non-current liability
illustration
On September 1, 2020, the company received P12,000
as one-year advanced rental from a tenant
Journal Entry:
Sept 1 Cash P12,000
Unearned Rent Income P12,000
Dec 31 Unearned Rent Income P4,000
Rent Income P4000
Gift certificates
 - is a card or piece of
Gift paper that you buy at a
store and give to
certificate someone, which entitles
the person to exchange

s payable it for goods worth the

same amount.
JOURNAL ENTRIES FOR GIFT CERTIFICATES
- When the gift certificates are sold:
Cash xx
Gift Certificates Payable xx
- When the gift certificate are redeemed:
Gift Certificates Payable xx
Sales xx
- When GF expire or not redeemed:
Gift Certificates Payable xx
Forfeited Gift Certificates xx
Gift certificates
 ABC Co. has just opened a novelty store. ABC decided to
sell gift certificates as part of its sales promotion. Transactions
relating to the gift certificates during the year are shown
below:
a. Sold gift certificates worth P100,000
b. Gift certificates worth P80,000 were redeemed
c. P10,000 gift certificates expired
d. P2,000 gift certificates were estimated not to be redeemed
Provide for the necessary journal entries and what
is the amount of unearned revenue from the gift
certificate should be presented at year-end?

Referring from the given, what should be the year-

end balance of unearned revenue if the gift
certificates expire one year after its issuance?
a. Sold gift certificates worth P100,000
Cash xx
Gift Certificates Payable xx
or
Cash P100,000
Unearned Revenue – gift certificates P100,000
b. Gift certificates worth P80,000 were redeemed
Unearned Revenue – gift certificates 80,000
Sales 80,000

c. P10,000 gift certificates expired

Unearned Revenue – gift certificates 10,000
Other Income – Gift Certificates Forfeited 80,000
 d. P2,000 gift certificates were estimated not to be redeemed

Unearned Revenue – gift certificates 10,000

Other Income – Gift Certificates Forfeited 80,000
Ending Balance Unearned Revenue – Gift Certificate