Liabilities

Definition: Debts and other financial obligations owed by a person or business.

Example

A property owner lists an outstanding mortgage and unpaid operating bills as liabilities on a financial statement.

Keep the distinction clear

Assets are resources owned or controlled; liabilities are obligations. Assets minus liabilities equals equity or net worth under the stated valuation basis.

Related terms

Asset · Balance Sheet · Equity

Keep studying

Income Approach: NOI, Cap Rate, Property Value, and Cash-on-Cash Return

References: FREC Course II syllabus: investment concepts

Pronunciation (US): lye-uh-BIL-uh-teez (capitals show stress)

Pronunciation reference: Merriam-Webster