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  1. keannu's Avatar
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    #1

    they are still liabilities

    Does the writer consider "Liabilities" as a broader concept than "debt"? Even if you buy something and keep it, that's not a debt. I can't get the underlined easily. Maybe he thinks as the title implies, whatever causes money out of your pocket is called liabilities.
    3) Liabilities = Money out of Your Pocket
    Liabilities are the opposite of assets. That is, they take money out of your pocket. Lots of things mentioned earlier, such as TV or a computer in your room, are liabilities because you took money out of your wallet when you bought them.
    Even though you sell them later for cash, they are still liabilities because you will get much less money than what you paid to buy them. Liabilities also include whatever you owe. If you borrow money from a friend or a family member, for example, it is a liability called debt. Did your parents use their credit card to buy you a new cell phone? Then they just created another liability. Also, if your brother or sister took out a loan from a bank to pay for college

  2. MikeNewYork's Avatar
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    #2

    Re: they are still liabilities

    Quote Originally Posted by keannu View Post
    Does the writer consider "Liabilities" as a broader concept than "debt"? Even if you buy something and keep it, that's not a debt. I can't get the underlined easily. Maybe he thinks as the title implies, whatever causes money out of your pocket is called liabilities.
    3) Liabilities = Money out of Your Pocket
    Liabilities are the opposite of assets. That is, they take money out of your pocket. Lots of things mentioned earlier, such as TV or a computer in your room, are liabilities because you took money out of your wallet when you bought them.
    Even though you sell them later for cash, they are still liabilities because you will get much less money than what you paid to buy them. Liabilities also include whatever you owe. If you borrow money from a friend or a family member, for example, it is a liability called debt. Did your parents use their credit card to buy you a new cell phone? Then they just created another liability. Also, if your brother or sister took out a loan from a bank to pay for college
    The writer seems to be talking only about financial liabilities.

  3. Grumpy's Avatar
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    #3

    Re: they are still liabilities

    Quote Originally Posted by keannu View Post
    Does the writer consider "Liabilities" as a broader concept than "debt"? Even if you buy something and keep it, that's not a debt. I can't get the underlined easily. Maybe he thinks as the title implies, whatever causes money out of your pocket is called liabilities.
    3) Liabilities = Money out of Your Pocket
    Liabilities are the opposite of assets. That is, they take money out of your pocket.
    Lots of things mentioned earlier, such as TV or a computer in your room, are liabilities because you took money out of your wallet when you bought them. Even though you sell them later for cash, they are still liabilities because you will get much less money than what you paid to buy them. Liabilities also include whatever you owe. If you borrow money from a friend or a family member, for example, it is a liability called debt. Did your parents use their credit card to buy you a new cell phone? Then they just created another liability. Also, if your brother or sister took out a loan from a bank to pay for college

    I'm not an accountant, but I think that most of them would disagree with the sentences I have coloured red above. As I understand it, what defines a "liability" is a future obligation to settle it. Thus, any sorts of borrowing or debts are certainly liabilities - but, since there is no specific future necessity to sell your "TV or computer", they are assets. The fact that the present value of your TV is less than what you paid for it is irrelevant: it's still an asset.

    I believe that someone called Robert Kiyosaki is pushing this new, broader, definition of what constitutes a liability. However, I haven't come across many who agree with him..
    I'm not a teacher of English, but I have spoken it for (almost) all of my life....

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  1. [General] liabilities vs. debt
    By thedaffodils in forum Ask a Teacher
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    Last Post: 12-Oct-2008, 18:49

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