In accounting usage, commitments refer to a stage in the expenditure process at which contracts or other forms of agreement are entered into, generally for future delivery of goods or services. A liability will not be recognized until delivery of the item, but the government is contractually committed to meeting the obligation once delivery is made. The term is also used in a more general, noncontractual sense to mean firm promises of the government made in policy statements.
A future promise to pay for goods and services. University of Alberta: - When placing a purchase order with a vendor, a promise is made to purchase goods/services at a certain price. The amount of the purchase is encumbered (held or committed) from your available funds to pay for the good/service when they are received.