Question Essay Example | Topics and Well Written Essays - 500 words - 9

Question - Essay Example These defined liabilities are the results of the past events that will be turning into future economic outflows from the company, these liabilities successfully meet the standard definition of obligation but their measurement and computation is often observed to be a debatable issue. As the above-discussed liabilities are future expenses for the company, their future value computation may depend upon numerous factors. These liabilities are very sensitive to the rates of interest of the country and other external factors such as government policies, inflation rates, time value of money, and the probable date of maturity. Their date of maturity may change and solely depends upon the clauses and covenants placed upon them in the contracts. The lease commitments are the future payments of the leased item. Only the current liability under the lease agreement contains a true value of the lease payment for the year, the non-current liabilities hold an estimated figure to be paid in the future. The purchase obligation makes an organization to bound into a commitment of purchase of an item in the future date. The market value of the item in the future cannot be defined in the present period; an estimated value is considered in this case as well. In the case of marketable securities, the rates and maturity periods, and markets for the item are estimated based on assumptions. The derivatives also fall into the same category. The nature of these obligations makes it difficult for the company to reflect and present the real and accurate value of these items. Hence, there is a possibility that the liabilities been shown by the companies may differ from their actual worth. Ernst & Young LLP is the audit firm which performs external audit of Apple Inc. and PriceWaterhouseCoopers performs external audit of Dell Inc. The auditors of both