Dividend entry liquidating A adult dating txt 223
IFRS 9 Financial Instruments states that financial liabilities should only be de-recognized by an entity when the related contractual obligation is 'discharged, cancelled or expired'.
Therefore, long outstanding trade and other payables should not be written off from the statement of financial position simply because they have not been paid long after their due date although receivables may be written off immediately in the accounting period in which they are considered as irrecoverable.
This is an application of the prudence concept which requires a degree of caution in the preparation of financial statements in order to avoid the overstatement of income and assets and the understatement of liabilities and expenses.
Trade creditors and other payables may be de-recognized in the following circumstances: The payment of liability results in the discharge of contractual obligation.
The liability must be reduced to the extent of the payment by cash or the transfer of other assets.