Apple Vs Samsung

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Apple Vs. Samsung

Under AASB Conceptual Framework, definitions of liabilities criteria are consist three key components, which must be held as present obligation of the entity, arising from the past transaction, then the result of an outflow will be expected from the entity of the resources reflecting economic benefits.

In this case (Apple against Samsung), satisfy all the definition criteria on the above that just define as liability. A possible obligation has arises in both company of Apple and Samsung, but not present obligation and just depends on which the company being successfully sued for paying compensation. The law of court will legally judge the present obligation, and either one of the company will be obliged to pay the compensation after the case being judged. A past transaction is proved that there is legal contract when both of the company copied the patent to each other’s. There is present obligation that company who had successfully being sued is required to pay the compensation for damages, but it is just a possible obligation due to the lawsuit is still ongoing. The present obligation is that a losing company obliged to pay compensation for loss to wining company and result of future outflow in economic benefit. But in this lawsuit, the outflow of economic benefit is not happening now, there has only just a possible outcome. Under AASB Conceptual Framework, a liability can be recognized and disclosed in a balance sheet when it meets the two criteria: the future outflow is probable occurrence; the amount of obligation can be reliably measured. The amount that is being sued in this case (Apple vs. Samsung), both of the company has just possible to happen, but not probable occurrence that the losing company has to pay the compensation for loss to wining company, because the lawsuit patent is still in processing. Due to the court has not been appealed, the compensation amount are cannot be reliably measured, therefore, the amount that being...
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