What is liability?
Liability in finance has long been an important aspect to consider when managing money. It essentially refers to that which an individual or business owes, such as debt
and unpaid bills. Liability involves a legal obligation on the part of a party to provide specific services or make payment for goods that are supplied.
Types of Liability
Liabilities are defined as current obligations or debts of a company. They range from current liabilities such as short-term loans, accounts payable, and current taxes, to long-term liabilities such as mortgage payments and bonds. Contingent liabilities are the potential obligations that a company must fulfill based on outcomes that are uncertain or outside of its control. It is important for businesses to understand each of these types of liabilities so they know how to best manage them.
Asset vs Liability
An asset is any form of possession that holds value, such as money, property, or investments; whereas a liability generally indicates a financial obligation or debt - something which detracts from one's total worth or net worth. Assets can provide returns or increase in value over time, whereas liabilities usually require fixed payments over a certain period.
Top Mutual Funds
3Y Returns
![]() Nippon India CPSE ETF AUM: 42,632 Cr | 55.93 |
![]() Nippon India ETF Nifty PSU Bank BeES AUM: 2,759 Cr | 44.78 |
![]() Kotak Nifty PSU Bank ETF AUM: 1,478 Cr | 44.73 |
![]() ICICI Prudential Bharat 22 ETF AUM: 18,904 Cr | 41.84 |
![]() ICICI Prudential Bharat 22 FOF AUM: 1,577 Cr | 41.50 |