#liability
Liability
Track and manage business liabilities and financial obligations
When Your Company's Tax Bill Becomes Yours: The Federal Priority Statute and Officer Personal Liability
A federal court held a non-owner corporate officer personally liable for $1,880,987.96 of a company's tax debt under 31 U.S.C. § 3713, the Federal Priority Statute, because he helped pay other creditors while the insolvent company owed the IRS. Here is how the doctrine works, who is exposed, and a practical checklist for winding down an insolvent business.
Loyalty Points Are a Liability, Not Revenue: How to Book Breakage and Deferred Revenue Under ASC 606
Under ASC 606, loyalty points are a deferred revenue liability until customers redeem them or you can prove breakage — Starbucks booked $200.4M in breakage revenue in FY2025 this way. This guide covers the journal entries for issuance and redemption, the 12-month data requirement for breakage estimates, and the rollforward schedule that keeps a rewards program auditable.
Business Owner's Policy (BOP): What the Bundle Covers, What It Costs, and What It Leaves Out
A Business Owner's Policy bundles general liability, commercial property, and business income coverage at 10–15% less than buying them separately — median premiums run $57–$83/month. Here's who a BOP fits, the exclusions that catch owners off guard, and why clean books determine how much a business income claim actually pays.
Contingency vs. Retained Search Bookkeeping: Why a 90-Day Replacement Guarantee Is a Refund Liability, Not a Freebie
Under ASC 606, a placement fee subject to a replacement-or-refund guarantee is variable consideration — recruiting firms should recognize only the historically-expected portion as revenue and hold the rest in a refund liability account until the guarantee window lapses.
Bookkeeping for House-Sitting Businesses: Per-Night Rates, Deposits, and Key Liability
House sitters typically charge $50–$150 per night for overnight stays and $250–$500 weekly, but a deposit collected before a sit begins is unearned revenue, not income, until the stay is completed or the cancellation window passes.
Grain Elevator Bookkeeping: Storage Fees, Basis Trades, and Deferred-Price Contracts Explained
Grain elevator bookkeeping separates elevator-owned inventory from bailment grain held for producers, tracks basis and deferred-price (NPE) contracts as distinct liabilities, and recognizes storage fees as service revenue earned over time rather than as a sale.
Independent Record Label Bookkeeping: How Royalty Recoupment Actually Works
Independent record labels calculate recoupment as a waterfall against advances for recording, video, and tour support, and industry estimates suggest 20% to 40% of digital royalties go unclaimed due to metadata errors like misspelled songwriter names or missing ISRC codes.
Kiteboarding School Bookkeeping: Why IKO's Insurance Structure Puts Liability on Individual Instructors, Not the School
IKO's Basic Instructor Membership covers instructors for recreational liability but excludes students during lessons unless the instructor teaches through a recognized IKO Center, a coverage gap kiteboarding schools should reflect in separate insurance sub-accounts, fleet depreciation schedules, and worker-classification decisions.
Structural Engineering Firm Bookkeeping: PoC Revenue, WIP, and E&O Tail Coverage
Structural engineering firms should recognize revenue by design-phase completion under GAAP percentage-of-completion (schematic 15–20%, design development 25–30%, construction documents 35–40%, construction administration 10–15%), track unbilled work-in-process separately from AR, and reserve for claims-made E&O tail coverage that can run 100–300% of an annual premium.
Umbrella Insurance for Small Business Owners: What It Covers and What It Costs
Commercial umbrella coverage of $1-2 million typically costs under $50 a month for low-risk small businesses, yet most personal umbrella policies exclude business activity entirely, leaving freelancers and side-hustle owners exposed above their general liability limits.
AI Liability Insurance in 2026: The Coverage Gap Hiding in Your Small Business Policy
Two ISO endorsements effective January 2026 — CG 40 47 and CG 40 48 — carve AI-related bodily injury, property damage, and advertising injury claims out of standard general liability policies, while 74% of small businesses already use AI tools. This guide covers what the exclusions remove, why the Air Canada chatbot ruling makes customer-facing AI the biggest exposure, and the two paths back to coverage: write-back endorsements and standalone AI liability policies.
Customs Broker and Freight Forwarder Bookkeeping: Duty Trust Funds, Drawback Recordkeeping, and Why an Import Duty Isn't Your Expense
Under 19 CFR 111.29, customs brokers must book client duty payments as liabilities, remit funds to CBP within five working days, and furnish a written accounting statement within 60 calendar days — a discipline that also protects duty drawback claims, which can recover up to 99% of duties paid on later-exported goods.