Background Note | HBS Case Collection | August 2000 (Revised November 2001)

Liability Reporting

by Paul M. Healy and Preeti Choudhary


By examining key criteria for recognizing a liability, this case explores liability recognition in straightforward situations and then examines the most difficult reporting issues in recording liabilities. These often arise when: 1) uncertainty arises about whether an obligation has been incurred; or 2) measuring the value of the obligation is difficult.

Keywords: Financial Reporting; Legal Liability; Valuation; Problems and Challenges; Accounting Industry;


Healy, Paul M., and Preeti Choudhary. "Liability Reporting." Harvard Business School Background Note 101-016, August 2000. (Revised November 2001.)