In finance, a liability refers to an obligation that an individual or entity owes to another party. It can be a financial or legal debt that has to be paid or settled in the future, usually in the form of cash or other assets. Examples of liabilities include bank loans, accounts payable, taxes owed, and mortgages. In accounting, liabilities are usually recorded on the balance sheet and are categorized as current liabilities, such as short-term debt, or long-term liabilities, such as bonds or long-term loans. The opposite of a liability is an asset, which is something that an individual or entity owns and has value.