Is the word "funding" in the heading below is a verb? And does liabilities here mean ability?

Question

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- Interest and fee expense on *funding liabilities*.

All interest, fees, and commissions incurred on deposit accounts of clients held by an MFI, as well as commercial or concessionary borrowings by an MFI that are used to fund all financial assets. It generally does not include interest expense on liabilities that fund fixed assets, such as mortgage or leasing interest. It includes accruals as well as cash payments.

Answer 1

"Funding" is a non-finite verb form, that is, it has no tense (present, past, future, etc.), no person (I, we, they, etc.) and no number (sing. and plural). The -ing form of any verb is called "present participle" (or "gerund" if it is the subject of the sentence, as in "Running is good for your health"). Here are a few examples of present participles:

(A) "They are watching TV" : it helps form the present progressive tense (= to be + -ing);
(B) "Let's go shopping": it's used after certain verbs ("she loves swimming", that is, after "to love", one must use the present participle) or expressions (such as "let's go + -ing");
(C) "funding liabilities": "funding" is an adjective, that is, it modifies the noun "liabilities".

"Liabilities" means "amount of debt that must be paid" or "sum of money that the client should pay for professional services" (= "interest", "fees", "comissions" and "borrowings").

Answer 2

Though generally 'funding' is classified as a trransitive verb, the usage 'funding liabilities' in the context of accountancy, which you have quoted, appears to me to be an adjective. This connotes liabilities which are funded or provided for in the accounts of a company etc. Hence I feel the word 'funding' used in the heading given by you is an adjective and not a verb.

Liabilities refers to something that is owed/owing by a person, company, etc. to another, such as a borrowing, loan, etc. which needs to be repaid in accordance with the contractual terms that are defined before the amount is disbursed to the borrower. That word here does not mean 'ability'.

Answer 3

This is a little difficult. Funding can be a noun or a verb depending on the context. Here I believe it is used as an adjective that describes the type of liability. i.e. a liability that 'funds fixed assets' is a 'funding' liability.

In financial terms liabilities are 'moneys owed' and in general terms liabilities are 'anything disadvantageous'.