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5 August, 2015 - 14:41

A liability is an obligation to transfer economic benefit as a result of past events.

Importantly, this definition does not take into account the legal position. It reflects the substance of the arrangement rather than the legal form.

Current liabilities represent liabilities that form part of the operating cycle e,g trade payables (trade creditors), or if not part of the operating cycle have a maturity of less than 12 months.