Definition
Hidden Liabilities refer to the omission, understatement, or concealment of existing obligations in financial reporting.
Context
Hidden liabilities are commonly associated with financial statement fraud, improper asset valuation, and weak internal controls. They often involve the manipulation or omission of provisions, contingent liabilities, or off-balance-sheet obligations.
Meaning
They distort the true financial position and create a misleading impression of financial strength.
Example
Failure to recognize required provisions for expected liabilities.
Sources
Suggested citation
wirtschaftsforensik.ch Editorial Team: "Hidden Liabilities", in: Glossary, wirtschaftsforensik.ch, https://wirtschaftsforensik.ch/glossar/hidden-liabilities/, accessed April 18, 2026.