The value at which a liability is recorded in the books of a business. It appears in the statement of financial position at the end of the period on the left side (liability and owners’ equity/ sources of funds). At initial recognition, a liability is recorded at historical cost (HC). This value is adjusted over time to reflect the best estimate of the liability given a number of factors including repayment, redemption, relief, etc.

It is also referred to as a carrying amount of a liability.