Spontaneous Liabilities


DEFINITION of 'Spontaneous Liabilities'

Liabilities of a company that are accumulated automatically as a result of the firm's day-to-day business. Spontaneous liabilities can be tied to changes in sales - such as the cost of goods sold and accounts payable. These liabilities can also be "fixed," as seen with regular payments on long-term debt.

BREAKING DOWN 'Spontaneous Liabilities'

The projected growth in spontaneous liabilities is an important component for firms to consider as they evaluate the need to borrow additional funds. Spontaneous assets and liabilities typically move with changes in sales. Spontaneous asset accounts include accounts receivable and inventories.

  1. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  2. Spontaneous Assets

    The assets of a company that are accumulated automatically as ...
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a ...
  4. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Long-Term Liabilities

    In accounting, a section of the balance sheet that lists obligations ...
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  1. Does working capital include salaries?

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  2. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  3. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  4. Are dividends considered an expense?

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