Liability: Difference between revisions
Huckelberry (talk | contribs) Create |
Huckelberry (talk | contribs) mNo edit summary |
||
| Line 1: | Line 1: | ||
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. | ||
Revision as of 19:18, 3 April 2011
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]