Obligation is a duty or responsibility to act or perform in a certain way. Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. Obligations also arise, however, from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner.
Obligation is specifically discussed in the IASB Framework for the Preparation and Presentation of Financial Statements.
Source: Glossary of Terms of IFRSs as at 31 December 2008.
