FACTOID # 27: If you're itching to live in a trailer park, hitch up your home and head to South Carolina, where a whopping 18% of residences are mobile homes.
 
 Home   Encyclopedia   Statistics   States A-Z   Flags   Maps   FAQ   About 
   
 
WHAT'S NEW
RELATED ARTICLES
People who viewed "Liability" also viewed:
 

SEARCH ALL

FACTS & STATISTICS    Advanced view

Search encyclopedia, statistics and forums:

 

 

(* = Graphable)

 

 


Encyclopedia > Liability

In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage.

Contents

Financial accounting

In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future. The field of accounting that serves external decision makers, such as stockholders, suppliers, banks and government agencies See also: Management accounting field of accounting concerned with external users of a companys financial information. ... In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group acting together, e. ...

  • They embody a duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services or other yielding of economic benefits, at a specified or determinable date, on occurrence of a specified event, or on demand;
  • The duty or responsibility obligates the entity leaving it little or no discretion to avoid it; and,
  • The transaction or event obligating the entity has already occurred.

Liabilities in financial accounting need not be legally enforceable; but can be based on equitable obligations or constructive obligations. An equitable obligation is a duty based on ethical or moral considerations. A constructive obligation is an obligation that can be inferred from a set of facts in a particular situation as opposed to a contractually based obligation.


The accounting equation relates assets, liabilities, and owner's equity: The basic accounting equation is the foundation for the double-entry book-keeping system. ... In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ... Ownership equity, commonly known simply as equity, also risk or liable capital, is a financial term for the difference between a companys assets and liabilities -- that is, the value that accrues to the owners (sole proprietor, partners, or shareholders). ...

The accounting equation is the mathematical structure of the balance sheet. In formal bookkeeping and accounting, a balance sheet is a statement of the book value of all of the assets and liabilities (including equity) of a business or other organization or person at a particular date, such as the end of a fiscal year. ...


The Australian Accounting Research Foundation [1] defines liabilities as future sacrifice of economic benefits that the entity is presently obliged to make to other entities as a result of past transactions and other past events.


Probably the most accepted accounting definition of liability is the one used by the International Accounting Standards Board (IASB). The following is a quotation from IFRS Framework: The International Accounting Standards Board (IASB) founded on April 1, 2001 is the successor of the International Accounting Standards Committee (IASC) founded in June 1977 in London. ...

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits

F.49(b)

Regulations as to the recognition of liabilities are different all over the world, but are roughly similar to those of the IASB.


Examples of types of liabilities include: money owing on a loan, money owing on a mortgage, or an IOU.


Classification of liabilities

Liabilities are reported on a balance sheet and are usually divided into two categories: In formal bookkeeping and accounting, a balance sheet is a statement of the book value of all of the assets and liabilities (including equity) of a business or other organization or person at a particular date, such as the end of a fiscal year. ...

  • Current liabilities — these liabilities are reasonably expected to be liquidated within a year. They usually include payables such as wages, accounts, taxes, and accounts payables, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations (e.g. from purchase of equipment), and others.
  • Long-term liabilities — these liabilities are reasonably expected not to be liquidated within a year. They usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties.— In these liabilities a company has to pay after a fixed or long period For ex:- Long term bank loans up to 1yr or more than one 1yr.

Liabilities of uncertain value or timing are called provisions - see Provision (Accounting). In accounting, current liabilities are considered liabilities of the business that are due within the fiscal year. ... A wage is a compensation which workers receive in exchange for their labor. ... In accountancy, an account is a label used for recording and reporting a quantity of almost anything. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        A tax is a financial charge or other levy imposed on... Accounts payable is a file or account that contains money that a person or company owes to suppliers, but hasnt paid yet. ... Adjusting entries are journal entries usually made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred. ... Long-term liabilities are liabilities with a future benefit over one year, such as notes payable that mature greater than one year. ... In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. ... This article or section should include material from Tenancy agreement A lease is a contract conveying from one person (the lessor) to another person (the lessee) the right to use and control some article of property for a specified period of time (the term), without conveying ownership, in exchange for... This article does not cite any references or sources. ... In commercial and consumer transactions, a warranty is an obligation that an article or service sold is as factually stated or legally implied by the seller, and that often provides for a specific remedy such as repair or replacement in the event the article or service fails to meet the... In accounting, provision means a liability of uncertain timing or amount. ...


In law

  • In commercial law, limited liability is a form of business ownership in which business owners are legally responsible for no more than the amount that they have contributed to a venture. If for example, a business goes bankrupt an owner with limited liability will not lose unrelated assets such as a personal residence (assuming they do not give personal guarantees). This is the standard model for larger businesses, in which a shareholder will only lose the amount invested (in the form of stock value decreasing). For an explanation see business entity.
  • Manufacturer's liability is a legal concept in most countries that reflects the fact that producers have a responsibility not to sell a defective product. See product liability.

Lady Justice or Justitia is a personification of the moral force that underlies the legal system (particularly in Western art). ... Tort is a legal term that means a civil wrong, as opposed to a criminal wrong, that is recognized by law as grounds for a lawsuit. ... This article or section does not cite any references or sources. ... Look up reputation in Wiktionary, the free dictionary. ... In the common law, civil law refers to the area of law governing relations between private individuals. ... Criminal law (also known as penal law) is the body of statutory and common law that deals with crime and the legal punishment of criminal offenses. ... Strict liability is a legal doctrine in tort law that makes a person responsible for the damages caused by their actions regardless of culpability (fault) or mens rea. ... English law is a formal term of art that describes the law for the time being in force in England and Wales. ... The Theft Act 1978 supplemented the earlier deception offences in English law contained in sections 15 and 16 of the Theft Act 1968 by reforming some aspects of those offences and adding new provisions. ... Compensation has several different meanings as indicated below. ... In law, damages refers to the money paid or awarded to a claimant (as it is known in the UK) or plaintiff (in the US) following their successful claim in a civil action. ... Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the right, ability or duty to... Agency is an area of commercial law dealing with a contractual or quasi-contractual tripartite set of relationships when an Agent is authorized to act on behalf of another <No it is not. ... Respondeat superior, Latin for let the master answer, is a legal doctrine which states that an employer is responsible for employee actions performed within the course of the employment. ... Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ... Limited liability (LL) is liability that is limited to a partner or investors investment. ... Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. ... The term business entity refers generally to any organization engaged in business activities, regardless of legal structure. ... Product liability encompasses a number of legal claims that allow an injured party to recover financial compensation from the manufacturer or seller of a product. ...

Bank account example

Money deposited with a bank becomes a liability of the bank, because the bank has an obligation to pay the depositor the money deposited; usually on demand. (The money deposited is an asset for the depositor; but this asset will not be recorded by the bank because it is not the bank's asset. If the depositor maintains accounting records separate and apart from the bank account maintained by the bank, only then will the asset be recorded.) In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ...


A debit increases an asset; and a credit decreases an asset. A debit decreases a liability; and credit increases a liability. link title Debit is an accounting and bookkeeping term that comes from the Latin word debere which means to owe. ... Look up credit in Wiktionary, the free dictionary. ... link title Debit is an accounting and bookkeeping term that comes from the Latin word debere which means to owe. ... Look up credit in Wiktionary, the free dictionary. ...


When a bank receives a deposit it credits a liability account called "Deposits" and credits the depositor's bank account for the same amount (the bank's "Deposits" account is the sum of all of the amounts credited to all of its customer's individual bank accounts). A deposit received by a bank is credited because the bank's liability to its customer, the depositor, increases. When a bank informs its depositor that it has debited the depositor's bank account, it means that the depositor's bank account has been decreased by the amount debited.


See also

Look up Liability in
Wiktionary, the free dictionary.

  Results from FactBites:
 
ISP Liability (BitLaw) (1956 words)
In addition, under the concept of "vicariously liability," a person may be liable for the infringing actions of another if the person has the right and ability to control the infringer's acts and receives a direct financial benefit from the infringement.
However, the Court found that Netcom may be liable to the Church under the theory of contributory infringement by materially contributing to the infringement of the user.
Although the case was settled by the parties and Prodigy moved for a withdrawal of the judge's decision, the judge refused.
ATRA :: Joint and Several Liability Rule Reform (1426 words)
The common law rule of joint and several liability, sometimes called the "deep pocket" rule, makes each and every defendant in a tort lawsuit liable for the entire amount of the plaintiff's damages regardless of the defendants' relative degrees of fault or responsibility.
The application of the doctrine of joint and several liability poses a particularly serious problem for professionals whose clients have become bankrupt or are otherwise "judgment proof." For example, many lawsuits that involve professionals are brought by shareholders or creditors of a bankrupt client.
Limited joint and several (except in products liability actions and actions involving a blame-free plaintiff) holds defendants severally liable except when uncollectible shares of a judgment are reallocated between solvent co-defendants according to their degree of negligence, joint and several liability is abolished for municipalities.
  More results at FactBites »

 
 

COMMENTARY     


Share your thoughts, questions and commentary here
Your name
Your comments

Want to know more?
Search encyclopedia, statistics and forums:

 


Press Releases |  Feeds | Contact
The Wikipedia article included on this page is licensed under the GFDL.
Images may be subject to relevant owners' copyright.
All other elements are (c) copyright NationMaster.com 2003-5. All Rights Reserved.
Usage implies agreement with terms, 1022, m