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Statement of Financial Accounting Standards
(SFAS) No. 6
a.
Disclosure of Long-Term Obligations
b. Issued in May 1981
Unconditional purchase
obligation
--> obligation to transfer funds (in the future)
for fixed (or minimum) amounts of goods and services
at fixed (or minimum) prices.
Unconditional purchase
obligation
with all of the following characteristics
--> required to be
disclosed.
a.
Non-cancelable
or
--> cancelable only if some remote contingency occurs
or
--> cancelable only with permission of other party
or
--> cancelable only if replacement agreement is signed
or
--> cancelable only if a penalty is paid
(when the penalty amount is so big that
the continuation of agreement is reasonably assured.) |
b. Negotiated as part of financing
--> for the facilities that will provide contracted goods or services
or
--> for the costs of contracted goods or services
c.
Remaining term is over one year.
Disclosure of
unrecorded obligations
a.
Nature and term of obligations
b.
Amount of fixed (and determinable) portion of obligations
as of balance sheet date.
c.
Nature of variable components of obligations
d.
Amounts purchased under the obligations
Disclosure of recorded
(as liabilities) obligations
--> for each
of five years following the balance sheet date
a.
Aggregate amount of payments
b.
Combined aggregate amount of maturities and
sinking fund requirements for long-term borrowings
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