Current Liability

Business, Legal & Accounting Glossary

Definition: Current Liability


Quick Summary of Current Liability


Debt, loan, trade credit or other obligation due for payment within one year.



What is the dictionary definition of Current Liability?

Dictionary Definition


A liability which satisfies any of the following criteria:

  • (a) it is expected to be settled in the entity’s normal operating cycle;
  • (b) it is held primarily for the purpose of being traded;
  • (c) it is due to be settled within 12 months after the balance sheet date.

Full Definition of Current Liability


In accounting, current liabilities are considered liabilities of the business that are to be settled in cash within the fiscal year.

For example accounts payable for goods, services or supplies that were purchased for use in the operation of the business and payable within a normal period of time would be current liabilities.

Bonds, mortgages and loans that are payable over a term exceeding one year would be fixed liabilities. However the payments due on the long-term loans in the current fiscal year could be considered current liabilities if the amount were material.

The proper classification of liabilities is essential when considering a true picture of an organization’s fiscal health.


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/current-liability/
Modern Language Association (MLA):
Current Liability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 25, 2020 https://payrollheaven.com/define/current-liability/.
Chicago Manual of Style (CMS):
Current Liability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/current-liability/ (accessed: September 25, 2020).
American Psychological Association (APA):
Current Liability. PayrollHeaven.com. Retrieved September 25, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/current-liability/

Definition Sources


Definitions for Current Liability are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 19th April, 2020 | 7 Views.