BF140 Business Financial Concepts: Project 4
Accounting for Liabilities
Project Description:
In the liabilities section of its 2016 balance sheet, Bank of America reported “noninterest-bearing deposits” in its U.S. offices of over $438 billion. Bank of America is a very large banking company. In the liabilities section of its 2016 balance sheet, Newmont Mining Corporation reported “reclamation and remediation liabilities” of more than $2.0 billion. Newmont Mining is involved in gold mining and refining activities. In its 2016 balance sheet, Delta Air Lines’ largest current liability reported was $4.6 billion for “air traffic liability.”
Read the following articles and answer the two questions below in your own words:
• “Non-Interest-Bearing Current Liability (NIBCL)” https://www.investopedia.com/terms/n/nibcl.asp#:~:text=A%20non%2Dinterest%20bearing%20current,expenses%20such%20as%20account%20receivables
• “North American surety: Protecting your reclamation liability” https://www.willistowerswatson.com/en-SA/insights/2017/09/mining-risk-review-north-american-surety-protecting-your-reclamation-liability
• “What does it mean when airline revenues are adjusted for air traffic liability?” https://www.investopedia.com/ask/answers/061615/what-does-it-mean-when-airline-revenues-are-adjusted-air-traffic-liability.asp
1. For each of the preceding liabilities, write a brief explanation of what you believe the nature of the liability to be, and how the company will pay it off. To develop your answers, think about the nature of the industry in which each of the companies operates.
2. Of the three liabilities described, which do you think poses the most risk for the company? In other words, for which liability are actual costs most likely to exceed the liability reported on the balance sheet? Uncertainty creates risk.
Submit your responses (at least 3 paragraphs) to Project 4 in Moodle.
FOR INSTRUCTOR USE ONLY
Grading Rubric
Grading accepts a start value of 100. Points will be deducted for failure to fully complete or meet the stated requirements. 90-100 = Represents work of superior quality (A); 80-89 = Represents work of good to very good quality (B); 70-79 = Represents adequate command of class content (C); 69 and below = Represents work that shows a need for development or improvement (F); 0 = Represents plagiarized work (F).
BF140: Business Financial Concepts (BCF)
Student:
Instructor:
Date:
Project 4
Description of requirements Possible Points Your Points
1. For each of the preceding liabilities, wrote a brief explanation of what you believe the nature of the liability to be, and how the company will pay it off. 60
2. Of the three liabilities described, which do you think poses the most risk for the company? In other words, for which liability are actual costs most likely to exceed the liability reported on the balance sheet?
20
Submitted at least 3 paragraphs in your own words 10
Assignment was submitted by due date 10
TOTAL 100
YOUR SCORE: ________
Instructor Comments:
