insolvency


insolvency

Condition in which liabilities exceed assets so that creditors cannot be paid. It is a financial condition that often precedes bankruptcy. In the context of equity, insolvency is the inability to pay debts as they become due; insolvency under the balance-sheet approach means that total liabilities exceed total assets.

This entry comes from Encyclopædia Britannica Concise.
For the full entry on insolvency, visit Britannica.com.

Seen & Heard

What made you look up insolvency? Please tell us what you were reading, watching or discussing that led you here.

Get Our Free Apps
Voice Search, Favorites,
Word of the Day, and More
Join Us on FB & Twitter
Get the Word of the Day and More