The glossary to understand and take action

Liabilities

The liabilities side of the balance sheet presents the company's sources of financing and obligations, including equity, provisions and debts according to the applicable format.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

Liabilities therefore do not include only amounts to be repaid. Equity must be distinguished from borrowings and trade payables in order to understand the financing of assets.

In your file

What this changes in practice

Reading the liabilities side helps to understand how the company finances its assets. Equity represents a category distinct from debts owed to banks, suppliers or public authorities. Maturities also matter: two balance sheets with the same total may present very different liquidity risks. The analysis must compare the recorded obligations with the contracts and the amounts actually due, without confusing a profit-making result with the ability to repay.

A scenario to help you understand

Educational example

A company finances a machine through a capital contribution and a loan. Both finance the asset, but only the loan follows a contractual repayment schedule. The manager separates them in the cash flow plan.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Distinguer fonds propres, provisions et dettes
  • Vérifier les échéances de remboursement
  • Rapprocher les soldes des relevés et contrats

The practical question

Find out more

Le passif est-il uniquement constitué de factures à payer ?

Non. Il comprend aussi les capitaux propres et d’autres éléments selon la présentation du bilan. Pour apprécier les échéances, isolez les dettes et leur horizon de paiement. Un capital apporté par les associés n’a pas la même fonction qu’un crédit bancaire ou une dette fournisseur, même si ces éléments participent au financement de l’actif.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

AssetsThe assets side of the balance sheet includes resources controlled by the company: fixed assets, inventories, receivables, cash and other items recognised under accounting rules.Balance sheetThe balance sheet presents, at a given date, the company's assets and the resources or obligations financing them.EquityEquity consists of accounting resources including, in particular, capital, reserves and results according to the applicable format.Net wealth taxNet wealth tax concerns the taxable assets of entities falling within its scope, in accordance with the applicable valuation and exemption rules.AccountingAccounting organises the recording of transactions and the production of information on the company’s financial position and results.BookkeepingBookkeeping consists of recording transactions, filing their supporting documents and monitoring accounts according to a regular organisation.

Put it into practice

Explore further with our guides

Practical guideAccounting obligations of an SARL in Luxembourg: organising compliance

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.