Posted: January 12th, 2015

Recognition of liabilities.

Recognition of liabilities.

It has been argued that many companies profits are overstated because they fail to take into account the full cost oftheir operating
activities.This is particularly relevant when considering the potential future environmental impact of both production and ultimate disposal
ofthe items they manufacture. considerthe current approach to accounting for liabilitites.

And the question is : How might this lead to

profits being overstated?

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