Balance-sheet insolvency
A position where a company’s liabilities exceed the value of its assets, taking relevant future and contingent liabilities into account.
Related terms
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Cash-flow insolvency
A position where a company cannot pay debts as they fall due, even if it may own assets with significant value.
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Deficiency
A shortfall between what is owed and what available assets or funds can cover, often shown in insolvency accounts or statements.
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Solvency
The ability to meet debts and financial obligations under the relevant financial and legal tests.
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