Passive

The liabilities, in financial accounting, includes the obligations imposed by the financing provided by a creditor and represents the monetary fund that the person or company owns and owes to third parties and has to pay or repay, usually in installments and established periods. Liabilities are made up of payments to banks (for credits and loans), suppliers, taxes, employee salaries, and so on. The liability is usually paid or returned by periodically, when it is a credit by also periodic amortization. A mortgage loan is a liability. The asset, on the other hand, includes the assets and financial rights that the person or company has.

Conceptual framework

According to International Accounting Standards, a financial liability is anything that includes:

• The obligation in a contract:

• to replenish cash or other financial assets to an entity or company.
• to exchange assets or financial liabilities under potentially unfavourable conditions for the company.

• A contract that can be or will be liquidated that:

• from being a derivative, its liquidation cannot be or will not be through the exchange of a fixed amount in exchange for a fixed number of its own capital instruments.
• not to be a derivative, oblige or be able to force a variable number of own capital.

Types of liabilities

Liabilities are grouped according to their enforceability, that is, their greatest and least urgency. Thus, there are short-term liabilities and long-term liabilities. Liabilities whose payment is more urgent put more stress on cash, so companies often list their liabilities in the order in which they are due. pay. Knowing how much of a company's liabilities are short-term and how much is long-term allows creditors to assess your company's feasibility of raising cash.

Demandable liabilities and non-demandable liabilities

• Requirable liability: It is a disused term that represents the total debts, documented or not, that the company has with third parties. They presuppose foreign funding. Funding may involve obligations with creditors, banks or obligors, for example.
  • In the long term: they are obligations whose maturity is more than one year from the date of the overall balance.
  • In the short term: they are obligations that have to be settled within the normal business cycle, usually their maturity is less than a year.
• Some authors speak of Pasivo unrequirable or own funds, which would consist of "social capital and reserves" (reservations). And they hold (without strong foundations) that "they are passive, because they belong to shareholders, but their return is not required to the company". In fact, in order for a liability to meet the status of such a liability, it must present some characteristics that the "capital of its own" does not meet (to mention one: which constitutes a sacrifice of resources not controlled by the entity), as for example, the accounting regulations in Argentina (Technical Resolution 16 of the Argentine Federation of Professionals in Economics). The inclusion of "own funds" within the liability, has no economic basis and may be a legalist resabio. See "passive" in accounting.
• Contingent liability: potential obligation arising from past events, the existence of which depends on a future event or which is not collected in the books for not forcing the company to withdraw from resources at present or not be eligible for quantification at present. In the event of compliance with the circumstances, the obligation is generated to third parties. A very common example is judicial litigation, with the consequent obligation in the case of a judgment against it. That is, it is a probable or eventual liability but not definitive.