Financial Reporting Essay

Financial Reporting

Current liabilities at Activision Blizzard Inc.

Current Liabilities for the Most Recent Annual Reporting Period

Current liabilities are classified as amounts which are owed to suppliers and creditors, which are due within 12 months (Harrison et al., 2012). The Activision Blizzard Inc. And Subsidiaries consolidated balance sheet shows total current liabilities at 31 December 2012 (the end of the most recent accounting period) as being $2,652 million. The company divides the current liabilities into three different categories; accounts payable, deferred revenues and accrued expenses and other liabilities.

The accounts payable may also be referred to as the trade payables, and is money which is due to the suppliers for goods that have been received, but not yet been paid (Wild, 2012). The amounts which are shown on the Activision Blizzard Inc. accounts payable will be accounts receivable on the relevant supplies balance sheet. At the end of 2012 the accounts payable was $343 million, and may have included payments to firms such as suppliers of raw materials, utilities suppliers etc.

The second category of liability is deferred revenues. Deferred revenues, which may also be referred to as deferred income or unearned income, refers to revenue that the company has already received, for the receipt of goods and services that have not been supplied *Wild, 2012).In other words, these may be perceived as payments in advance, classified as a liability because the company still has to provide the goods and services associated with those payments (Harrison et al., 2012). At the end of 2012 these amount to $1,657 million.

Accrued expenses costs are expenses which have been incurred, but not yet paid (Harrison et al., 2012). The accrued expenses will usually include costs such as marketing, cost of distribution and the cost of utilities. With accrued expenses there is usually a billing cycle, so the invoices for the relevant cost may not yet have been issued, but the services had been used so it is known there will be amounts due (Wild, 2012). The accrued expenses, along with any other current liabilities amount to $652.

Current Liabilities for the Previous Recent Annual Reporting Period

2012 shows an increase of current liabilities compared to 2011, when the total current liabilities were $2,556 million. However, although the overall level was louder, the accounts payable in 2011 was higher, with $390 million outstanding. A decreasing level of accounts payable may usually….....