An Example of Where an Entity Has a Present Obligation

question 2

Multiple Choice

An example of where an entity has a present obligation is:

• A) a public announcement made by an entity's management to undertake restructuring.
• B) a recommendation from the HR manager to the Board of Directors as to the level of bonuses to be paid at the end of the financial period.
• C) a historical pattern of performing a major overhaul of plant and machinery every three years.
• D) the declaration of a dividend by directors which is yet to be approved at a meeting of shareholders.