Last Updated on 08/04/2021 by 75385885
Commitments are items that are not reported as liabilities as of the balance sheet date. Some of these items are reported in the notes to the financial statements.
Examples include non-cancelable (as at balance sheet date) binding contracts to rent space in the future or to purchase items at specified prices. Off-course the inception of the commitment is on or before balance sheet date.
A financial commitment is a commitment to an expense at a future date.
A capital commitment is the projected capital expenditure a company commits to spend on long-term assets over a period of time.