NBS Company has guaranteed a $1,000,000 bank note for XY Company. How would this influence the liquidity ratios of NBS Company? How should this situation be considered?
Bank guarantee is a contingent liability for the organization. Thus this will be considered as contingent liability and will not affect the liquidity of the company immediately.
According to IAS 37 Contingent ...
This Solution contains over 100 words to aid you in understanding the Solution to this question.