Floating liabilities are usually short-term loans that must be paid. Usually, they are secured against assets that are constantly changing in value like a company’s Accounts Receivable.
For example…
In Chelsea’s wheelchair manufacturing business, floating liabilities are common. Her business’s short term loans that comprise the floating liabilities may include debts against wheel spokes and seat material one week and electronic components another week. Each of these components may have different manufacturers and differ in value.
