What are Accrued Liabilities

Both outstanding expenses and accrued liabilities are same meaning. When we have taken services but we did  not pay the money during accounting period to whom we got the services, at that time, it will become our accrued liabilities. It will be the part of our current liabilities. If there are large number of accrued liabilities in the balance sheet, it will affect liquidity position in future because in future, when we will pay, we have to stop other payments or in case, if we have not any cash money, it may be risky for becoming solvent.


Some companies are very smart, they give the options to its creditor to get company's share. At that time, company's balance sheet will improve because one side, it will decrease company's current liability and second side, company will not face cash crisis. Its latest example, we can see in Iron Eagle Group, Inc. It has converted its accrued liabilities in common shares in Iron Eagle

As per The Wall Street Journal

A number of directors, employees, and a consultant of Iron Eagle have converted their accrued fees and out of pocket expenses owed to them by Iron Eagle into restricted common stock at the market price of $0.25. This had the net result of improving shareholder's equity by $1,246,000.
"Iron Eagle is strongly positioned with its management team, Tru-Val, and strategic plan to take advantage of many factors to the benefit of its shareholders," stated Joseph Antonini, Chairman of the Board of Directors of Iron Eagle and former CEO and Chairman of Kmart and board member of Shell Oil. He further commented, "I am proud to be an Iron Eagle shareholder, and am optimistic about our future for the Company and all of its stakeholders."