A decision to take on an additional liability


  • According to Brooks (2013), actuaries use statistical methods to estimate the timing and cost of future undesirable events. He goes on to say that the amount of assets required to fund a future liability is the present value of a future sum, annuity, or uneven cash flow. (Brooks, 2013) How might a manager use this information when making a decision to take on an additional liability?
  • Describe the differences between accounting methods used for financial reporting and tax. Can a company use the same methods for both financial reporting and tax? Why or why not?

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Finance Basics: A decision to take on an additional liability
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