Liabilities & Provisions
Provisions & Contingent Liabilities
Why a company being sued for ₹10,000 crore might show nothing at all on its balance sheet about it — while a company facing a much smaller, more certain claim has to book the full amount as an expense today.
Employee Benefits (Gratuity & Defined Benefit Plans)
Why a company can owe an employee who hasn't resigned yet, and won't for years, a real liability on its balance sheet today — calculated using life-expectancy tables and interest-rate assumptions, not a simple formula.
Deferred Tax Assets & Liabilities
Why a profitable company can owe the tax department far less than its P&L 'tax expense' suggests — and why a loss-making company can still show a tax expense on its books.
Onerous Contracts
Why a company can be forced to book a loss today on a contract it hasn't even started performing yet — simply because it already knows, with certainty, that the contract is going to lose money.
Current vs Non-Current Classification
Why breaching a single financial covenant on a 10-year loan, even years before it's actually due for repayment, can force a company to show that ENTIRE loan as due within the next 12 months.
Warranty Provisions
Why a company selling a washing machine with a 2-year warranty has to book part of the EXPECTED future repair cost as an expense on the very day it sells the machine — long before a single customer has ever called in for a repair.