Explain why each of the following items should (or should not) be reported as liabilities in the financial statements:

a. Estimated future repair and maintenance costs for equipment owned by the firm at the balance sheet date.

b. Estimated employee retraining costs related to a plant closing that management has planned to implement subsequent to the balance sheet date.

c. Potential effects of defaults on accounts receivable owed by the firm’s largest customer.

d. An airline’s obligations to redeem $5 billion of unused frequent flyer miles, for which the passengers can claim free or discounted tickets. LOP9