Question

Briefly write about the Extinguishment of Non-Current Liabilities with suitable examples.

Answer 1

Solution -

Lability has been extinguished if following condition are satisfied

1- Debtor pay the creditor and is relieved of its obligation for the liability

Creditors can be paid by following manner-

-By cash

-Deleivery of other financilal asset

-Delivery of other goods or services

2- Debtor is legally released from being the primary obliger under the liability either judically or by creditor

Example -

If any debt is secured by security then if that case if borrower fail to pay the debt but such debt is secured by higher

secuirity then in that case creditor will extinguish the debt