Liability: Difference between revisions
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A '''liability''' is a something for which one is obligated.<ref name="dictionary">" | A '''liability''' is a something for which one is obligated.<ref name="dictionary">"Liability - Definition and More from the Free Merriam-Webster Dictionary." Dictionary and Thesaurus - Merriam-Webster Online. [http://www.merriam-webster.com/dictionary/asset online] (accessed April 3, 2011).</ref> Most often, in financial accounting, a liability is [[debt]] or ''de facto'' debt. | ||
According to U.S. GAAP: | According to U.S. [[GAAP]]: | ||
<blockquote>"[A Liability is] probable future sacrifices of economic benefits, arising from present obligations of a particular entity, to transfer assets or provide services to other entities in the future."<ref name="FASB">FASB Concept Statement No. 6, paragraph 35</ref></blockquote> | <blockquote>"[A Liability is] probable future sacrifices of economic benefits, arising from present obligations of a particular entity, to transfer assets or provide services to other entities in the future."<ref name="FASB">FASB Concept Statement No. 6, paragraph 35</ref></blockquote> | ||
Under International Financial Reporting Standards or IFRS, a liability is: | Under International Financial Reporting Standards or [[IFRS]], a liability is: | ||
<blockquote>"...a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits."<ref name="IASB">IASB Conceptual Framework, paragraph 49</ref></blockquote> | <blockquote>"...a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits."<ref name="IASB">IASB Conceptual Framework, paragraph 49</ref></blockquote> | ||
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== References == | == References == | ||
{{reflist}} | {{reflist}} | ||
[[Category:Concepts]] | |||
Latest revision as of 10:14, 1 January 2012
A liability is a something for which one is obligated.[1] Most often, in financial accounting, a liability is debt or de facto debt.
According to U.S. GAAP:
"[A Liability is] probable future sacrifices of economic benefits, arising from present obligations of a particular entity, to transfer assets or provide services to other entities in the future."[2]
Under International Financial Reporting Standards or IFRS, a liability is:
"...a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits."[3]