by Glenn Cheney Norwalk, Conn. — In a continuing effort to quickly converge at least a few U.S. standards to international standards, the Financial Accounting Standards Board is hammering out a proposal on liability classification. The proposal is likely to redefine current liability, but in so doing, it may complicate accounting at small businesses.
The proposal tightens the definition of current liability to require the use of a company’s balance-sheet date as the cutoff date for determining whether a liability is current. Existing generally accepted accounting principles allow companies to use any date up to the issuance of the relevant financial statement.
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