Back to the Basics of Recovery Step Four–The Assets and Liabilities Checklist

By Wally P.

Assets and Liabilities Checklist

For those of you who are reading The Sober World for the first time, Wally P is taking us through the steps each month (excluding September due to travel commitments).For those of you who would like to read Steps 1, 2, and 3, please go to and you may read them online.


Made a searching and fearless moral inventory of ourselves.

In the past three articles, we have been through the Surrender process as practiced by the A.A. pioneers during the 1940’s. The sponsor read a few key passages either from the “Big Book” or from a typed sheet of these passages, and together the sponsor and the newcomer took the first three Steps.

The sponsor read the “Big Book” passages to the newcomer because, in most cases, the newcomer didn’t have a book. The “Big Book” cost the equivalent of $95.00 today; so the book was not only big, it was expensive. Many groups had to pass the basket for weeks and sometimes months, to come up with enough money to buy one book. Key passages from this book were typed up, mimeographed, and distributed to home group members. They used these carefully selected passages when working with newcomers. Please keep this in mind as we proceed through the Steps as they were taken during A.A.’s early days.

We are now ready to start the Sharing process (Steps 4, 5, 6 and 7) by taking the Fourth Step. Many people today are unfamiliar with the assets and liabilities checklist used by the A.A. pioneers to take newcomers through this step. This “commercial inventory” is described on page 64 of the “Big Book” and consists of Resentment, Fear, Selfishness, Dishonesty, Inconsideration, Jealousy, Suspicion, and Bitterness. These liabilities are found on pages 64, 68 and 69 of our “basic text.”

Why assets and liabilities? Many early A.A.’s were business people and they readily identified with the “commercial inventory” represented by the equation for double-entry bookkeeping: Assets = Liabilities + Owner Equity.

Why didn’t the pioneers use the example on page 65? They didn’t know how to. The “three-column inventory” didn’t come into general use until the 1970’s when several writers published inventory guides based on the columns.

Where did the assets and liabilities checklist come from? It came from the Oxford Group, the organization from which A.A. evolved. Oxford Group members (including Bill W. and Dr. Bob) used it to take people through the Steps before the “Big Book” was written. The assets they used were Honesty, Purity, Unselfishness and Love and the liabilities were Dishonesty, Resentment, Selfishness, and Fear. These same four liabilities are part of the “commercial inventory” in the “Big Book.”

In June 1946, The A.A. Grapevine published a list of assets and liabilities. The “Little Red Book,” released in the fall of 1946, used an assets and liabilities checklist, as did the step guide titled, “Highroad to Happiness” which was circulated throughout A.A. in the 1950’s.

When the “Twelve and Twelve” was published in 1952, the authors made no reference to a three-column inventory during their description of the Fourth Step. They did refer to, in great detail, the assets and liabilities checklist. On page 42, they state:

“. . . Nearly every serious emotional problem can be seen as a case of misdirected instinct. When that happens, our great natural ASSETS, the instincts, have turned into physical and mental LIABILITIES.”

“Step Four is our vigorous and painstaking effort to discover what these LIABILITIES in each of us have been, and are.”

On page 49 of the “Twelve and Twelve,” the authors present the seven deadly sins plus fear as the liabilities to inventory. These eight liabilities are quite similar to the ones found in our “basic text.”

In the “Big Book,” the introduction to the Fourth Step starts at the bottom of page 63:

“Next we launched out on a course of vigorous action, the first step of which is a personal housecleaning, which many of us had never attempted. Though our decision was a vital and crucial step, it could have little permanent effect unless at once followed by a strenuous effort to face, and to be rid of, the things in ourselves which had been blocking us.”

This is a very important paragraph. The “Big Book” authors tell us we are to take the Fourth Step immediately after the Third Step prayer. There is no waiting period between the Surrender and Sharing Steps.

In the first paragraph on page 64, the authors describe the assets and liabilities checklist. “Therefore, we started upon a personal inventory. This was Step Four. A business which takes no regular inventory usually goes broke. Taking a commercial inventory is a fact-finding and fact-facing process. It is an effort to discover the truth about the stock-in-trade. One object is to disclose damaged or unsalable goods, to get rid of them promptly and without regret.”

Whether you use the assets and liabilities checklist on page 64 or the three- column example on page 65, please sit down with the newcomer and fill out the inventory sheet or sheets together. This is how it was done in the early days. The A.A. pioneers knew this was a very stressful and uncertain time for the newcomer and they didn’t want him or her to relapse over this “fact finding and fact facing process.” That’s why the sponsor and the newcomer worked the Fourth Step as “partners.” In subsequent articles, I will show how the sponsor and the newcomer made amends together, practiced two- way prayer together, and worked with the next newcomer together.

About the Author

Wally P. is an archivist, historian and author who, for more than twenty- three years, has been studying the origins and growth of the Twelve-step movement. He is the caretaker for the personal archives of Dr. Bob and Anne Smith.

Wally conducts history presentations and recovery workshops, including “Back to the Basics of Recovery” in which he takes attendees through all Twelve Steps in four, one-hour sessions. More than 500,000 have taken the Steps using this powerful, time-tested, and highly successful “original” program of action.