There are three essential characteristics of liabilities:
They embody a duty or responsibility to others, that leaves a government little or no discretion to avoid settlement of the obligation;
The duty or responsibility to others entails settlement by future transfer or use of assets, provision of goods or services, or other form of economic settlement at a specified or determinable date, on the occurrence of a specified event or on demand; and
The transactions or events obligating the government have already occurred.
Liabilities can arise from many types of obligations, such as: