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{{def|Liability|/ˌlaɪəˈbɪlɪti/|n|}} | {{def|Liability|/ˌlaɪəˈbɪlɪti/|n|}} | ||
The ''[[value]]'' of one’s legal [[obligation]]. In [[financial services]] — | The ''[[value]]'' of one’s legal [[obligation]]. In [[financial services]] — indeed, generally in the arithmetic reckoning of the [[common law]] which sees the world as some kind of eternal ledger of debits and credits, that duty ''as articulated as a sum of [[money]] payable''. Now, I am somewhat making this up as I go along, readers — no change there — but practitioners in financial services have a notoriously loose grip of the English language, so hang it, call it a ''financial poet’s licence''. We monetary bards<ref>I say this in the plural, but I am yet to meet another one; it is a rather singular occupation.</ref> like to wield vocabulary with the deftness of a sturgeon. So let’s. | ||
In the narrowest sense, a “liability” is a term of accounting art: everything that an “[[asset]]” is not, only rendered in those monochromatic, monetary terms — accountants are colour-blind: they ''only'' understand the world in dollars and cents; they perceive only the decimal code underlying the multi-hued panorama that confronts the rest of us — but this is, in its way, a useful concept to hold onto when drafting a legal contract. It distinguishes a ''liability'' from an ''[[obligation]]'': your ''obligation'' is to provide a [[carbolic smoke-ball]] of merchantable quality; your ''liability'' is to pay £100 to a purchaser should it not work.<ref>Huh. I wonder if they would work for [[Covid]].</ref> | In the narrowest sense, a “liability” is a term of accounting art: everything that an “[[asset]]” is not, only rendered in those monochromatic, monetary terms — accountants are colour-blind: they ''only'' understand the world in dollars and cents; they perceive only the decimal code underlying the multi-hued panorama that confronts the rest of us — but this is, in its way, a useful concept to hold onto when drafting a legal contract. It distinguishes a ''liability'' from an ''[[obligation]]'': your ''obligation'' is to provide a [[carbolic smoke-ball]] of merchantable quality; your ''liability'' is to pay £100 to a purchaser should it not work.<ref>Huh. I wonder if they would work for [[Covid]].</ref> | ||
We are close to the netherworld of jurisprudence by which we ask what ''is'' [[money]]. But let’s save that for another day. | We are close to the netherworld of jurisprudence by which we ask what ''is'' [[money]]. But let’s save that for another day. | ||
A company’s [[shares]], by way of illustration, are ''not'' [[liabilities]], but rather represent an ''ownership'' interest in the issuing company. | A company’s [[shares]], by way of illustration, are ''not'' [[liabilities]], but rather represent an ''ownership'' interest in the issuing company. | ||