Liability (financial accounting)

Liabilities denote the law of obligations, the obligation of a debtor to the creditor. In a business sense are liabilities for the sum of the outstanding financial obligations of a company towards its suppliers and other creditors. The counterpart liabilities are debts. In the balance sheet ( exactly known ) liabilities are distinguished from the ( uncertain ) provisions.

Liabilities in the Commercial Code

The completeness principle according to § 246 HGB requires the complete passivation of all existing debts at the reporting date, to the extent legally otherwise specified. All debts must therefore be recognized in the balance sheet of the businessman. A conversion of debt to assets, such as land and mortgage, is prohibited ( prohibition to offset ). This liability may be passivated, it must meet the following criteria:

First criteria for financial disclosure obligations:

  • There must be an economic burden on assets. After a civil or public service obligation is neither necessary nor sufficient condition of a legal accounting guilt; purely economic benefit obligations are to passivate. A financial disclosure debt is thus only as liabilities when future expenses represent to settle the obligation immediately deductible expenses.
  • The economic impact assets must also be tangible. A financial disclosure obligations must be adequately specified, otherwise they are called general business risk. Tangibility of the load is substantiated both by the external obligation principle according to which the obligation of objectification reasons to a third party must exist. A performance constraint against a third party may be legally justified or made ​​in a de facto capacity constraint. In addition, the use of the obligation must be " likely," which will be the case if more reasons than speak against the loading or creation of a debt and a future use. It sums it up under the notion of objectified minimum probability.
  • The debt must meet the criterion of quantification. This is equated generally with self- evaluability, which requires an estimation process for uncertain liabilities.

2 Temporal criteria (Question of Passivierungszeitpunktes ):

  • According to settled case-law of the Federal Fiscal Court ( BFH ) are as Passivierungszeitpunkte the full legal origins and economic causation relevant. The timing of a possible legal creation is usually relatively easily and precisely defined, whereas the timing of economic causation is indeterminate and therefore much more difficult to determine. As a rule, it is finalized by the so-called realization principle in § 252 paragraph 1 No. 4 HGB. The realized profits According to this principle are just the expenses are allocated that were required to achieve the sales ( factual component / Matching Principle ) ( next: reasoning about economically significant factual conditions possible). The BFH want to know the debt to the earlier of the two times passivated.

Definition according to IAS / IFRS

The International Accounting Standards and the International Financial Reporting Standards define Framework ( F.49b ) a liability (liability ) as follows: A liability is a

  • Present obligation that on
  • A past event based, from which a
  • Probable future outflow of resources results.

Demarcation to provisions

An obligation is accounting law only a liability even if the financial burden and the time of occurrence are known. Contingencies, ie obligations that are expected, in the amount and / or time of occurrence are unclear but are referred to as opposed to liabilities as provisions and accounted for.

Typical examples of provisions, pension provisions ( expected cost for future pension payments to employees), or liability for the estimated cost of warranty claims.