AASB 119 Has Resulted in Many More Companies Recognising Liabilities

question 37

Multiple Choice

AASB 119 has resulted in many more companies recognising liabilities for employee entitlements.There is evidence that this requirement has the effect of:

• A) Creating cash reserves from which employee entitlements can be paid in the case of company insolvency.
• B) Increasing the probability of companies becoming insolvent.
• C) Reducing the level of employment in Australia.
• D) Increasing the probability that employees will be paid their full entitlements in the case of the entity becoming insolvent.
• E) None of the given answers.

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Definitions:

Valid

Legally acceptable and recognized, having force or binding effect; applicable to contracts, agreements, or official documents.

Probate

The legal process through which a deceased person's will is validated, and their estate is distributed to heirs and designated beneficiaries.

Enforceable Trust

A trust arrangement that meets all legal requirements and therefore can be executed as per its terms.

Legal Capacity

The ability of an individual or entity to enter into binding contracts, sue, and be sued, recognized by law.