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DownloadUpdated: November 2015
Contractual obligations
- Obligations of a government to others that will become liabilities in the future when the terms of those contracts or agreements are met.
- They are distinct from liabilities since no past transaction or event obligating the government to a future sacrifice of economic benefits has occurred at the financial statement date.
- The government does not have a liability until a transaction or event under a contract occurs.
- Disclosure of contractual obligations relates to the unperformed portion of these contracts.
- They are distinct from contingent liabilities since there is no uncertainty related to the existence of the contractual obligation.
Disclosure
- A government’s financial statements must disclose information about a government’s contractual obligations. This disclosure must be provided in the notes or schedules of the financial statements and a description of the nature, extent and timing of the related expenditures must be included.
BDO can help you navigate the road ahead
Applying financial reporting standards can be quite complex. The BDO team can help you assess your situation and prepare for the opportunities and challenges involved.
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