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General Accounting Discussions: How do you properly record a judgement long term liability

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  1.  
    • CommentAuthorlorelee
    • CommentTimeMay 28th 2008
     
    see above
    • CommentAuthorlorelee
    • CommentTimeMay 28th 2008
     
    How do you properly record a long term liability that is a judgement ?
  3.  
    A judgement may actually be a current liability is there is no flexibility in paying it off.

    The entry is a debit to expense and a credit to the liability account.
    Thankful People: lorelee
    • CommentAuthorlorelee
    • CommentTimeMay 29th 2008
     
    Thanks so much for your response.
    My concern was showing a $200k expense in a single period. This liability is payable over a 5 year period.
    If I were to keep it a current liability and expense the monthly payment amount, How could I explain the reasoning why I did not create a long term liability for this ?
    I appreciate your time and advice.

    Regards
  5.  
    Your response goes to the "flexibility" I mentioned. A five year payoff would mean that it is a long term liability. As to recording the expense in a single period you will have to appeal to a higher authority as that is beyond my pay bracket.
    Thankful People: lorelee
    • CommentAuthorlorelee
    • CommentTimeMay 29th 2008
     
    Tee-Hee ! Great sense of humour !

    Thanks again for your advice/assistance

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