A monetary liability is a liability whose value is measured and stated in monetary terms (cash amounts). As such, it is a fixed obligation that an entity has to pay/ settle/ transfer. As opposed to a non-monetary liability, a monetary liability reflects an obligation whose amount is clearly stated in a invoice, a loan agreement, etc., in monetary terms. The amount of the obligation to be paid is definitely expressed in monetary terms.
Examples of monetary liabilities include:
- Trade payables.
- Notes payable.
- Accruals and bills payable.
- Refundable deposits.
- Dividends payable.
- Other amounts payable (taxes, wages, etc.)
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