Liability Reserve
/ˌlaɪəˈbɪləti rɪˈzɜːrv/
Definitions
- (n.) An accounting provision set aside by a company to cover probable future obligations or losses arising from existing liabilities.
The company increased its liability reserve to prepare for pending lawsuits.
Forms
- liability reserve
Related terms
See also
Commentary
Liability reserves are critical in ensuring accurate financial reporting and compliance with accounting standards, helping reflect realistic obligations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.