What Is A Liability?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

A liability is any debt that is owed by a firm, individual or country. Liabilities detract from value and are used to finance assets.

All liabilities are listed on a company's balance sheet and are defined as either current (held for less than one year) or long term (held for more than one year). The most common kinds of liability found on a balance sheet are listed below:

Current Liabilities

  • Accounts Payable
  • Accrued Expenses

Long Term Liabilities

  • Deferred Long Term Revenue
  • Long Term Debt

Related Terms

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.