Are liabilities the same as debt?

Question

0

Durrant 0 Comments

Do you know if liabilities and debt is the same thing? If not, what are the differences and the similarities?

1 Answer

score 0 · Answer 1 · 2012-12-02T22:25:52+00:00

It can be the same but it can also be different. Debt is a liability but there are liabilities that are not debt. For example, a contingent liability is a liability but its not a debt. You don’t own money to someone (at least not for sure). You just consider (you might have evidence for that) that its more likely than not to be liable to pay for something that has happened in the past and you have posted a liability in your accounts.