Liquidation Basis of Accounting

Question 1

How are assets presented under Liquidation Basis of Accounting? Liabilities?

Answer 1

• At amount of cash expected from liquidation process

- In accordance w/ US GAAP

Question 2

What must entity do with expected costs associated with liquidation?

Answer 2

-Accrue and separately present them

Question 3

What must be disclosed under Liquidation Basis of Accounting?

Answer 3

• Description of liquidation plan
• Methods and significant assumptions used to measure assets and liabilities
• Costs and income accrued associated with liquidation pan

Question 4

What is the purpose of Liquidation Basis of Accounting?

Answer 4

-Inform F/S users liquidation imminent, NOT report net cash flow to be received from bankruptcy process