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1. Financial reporting - balance sheet.

In financial reporting, liabilities are present amounts or present obligations of a reporting entity arising from past transactions or events, the settlement of which may result in:

  • The transfer or use of assets, for example payments of money
  • The provision of services or
  • Other yielding of economic benefits in the future.

Examples include overdrafts, trade payables, accruals and provisions.

Liabilities are represented in the balance sheet by credit balances.

2. Lending - borrowing.

More generally, liabilities are any obligations or amounts owed to others (whether or not they are obligations of a financial reporting entity).

See also