SDDS Wiring-Guide

Definition:

A liability represents a present obligation as a result of past events. A fee payable at the end of the life of a vehicle or at any other time during the life of a vehicle may not meet the criteria for recognition as a provision or liability in accordance with the different GAAPs at reporting date. 

Examples of such fees include performance fees, disposal fees, or liquidation fees, representing a present obligation from contractual arrangements.

Most of these fees are normally accrued under different accounting rules. The adjustment represents the impact on the NAV for the amount of the estimated contractual fees payable based on the current NAV of the vehicle if, in rare circumstances, these fees are not already recognised in financial statements produced under different GAAPs and it is probable that they will be incurred. In order to determine the amount of the adjustment, reference should be made to IFRS standards for the measurement (but not necessarily the recognition) of provisions or deferred liabilities. 

A description of the calculation methodology and the terms of the underlying agreement should be disclosed (or reference could be made to the related party disclosures in which such agreements and terms are explained).