Liabilities

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The Hindu Business Line  Nov 7  Comment 
Industry says third-party motor insurance claims in excess of ₹12,000 cr
New York Times  Nov 7  Comment 
It is the latest loss for the company as it fights court decisions that could bring $18 billion in penalties.
Mondo Visione  Nov 5  Comment 
Please be advised that EDGA Exchange, Inc. (“EDGA”) and EDGX Exchange, Inc. (“EDGX”, and together with EDGA, the “Exchanges”) have amended the liability caps under EDGA Rule 11.121 and EDGX Rule 11.14 related to Limitation of...
Insurance Journal  Oct 31  Comment 
Halloween pranks. Google this phrase and more than 5 million results link you to a myriad of ways to “mess with peoples’ minds” on Halloween. Some of the recommended pranks require a higher education to understand; some ideas are, well,...
Benzinga  Oct 29  Comment 
Cara Therapeutics, Inc. (Nasdaq: CARA), a biopharmaceutical company focused on developing and commercializing new chemical entities designed to alleviate pain without eliciting typical opioid (narcotic) side effects, today announced positive...
Insurance Journal  Oct 22  Comment 
Retail insurance broker EPIC (Edgewood Partners Insurance Center) has hired John Walsh as principal of Executive Liability and Financial Lines insurance. Walsh will be based in Stamford, Connecticut, and will report to Steve Levene, managing...
Insurance Journal  Oct 21  Comment 
Trinity Industries Inc. faces a potential liability of $1 billion after a jury found the company defrauded the U.S. by deliberately withholding information about cost-saving changes to its highway guardrail system that potentially made it more...
The Economic Times  Oct 18  Comment 
The govt approved a DoT proposal for providing one-time financial support to MTNL for meeting liabilities arising from levy of minimum alternate tax (MAT).
Insurance Journal  Oct 15  Comment 
Massachusetts Gov. Deval Patrick has signed into law a bill that would require the Massachusetts Property Insurance Underwriting Association (MPIUA) — also known as the Massachusetts FAIR Plan — to have liability coverage included in its...




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A liability is an accounting term for anything of value a company or an individual owes. Liabilities can include financial liabilities usually debt or fixed goods which have yet to be delivered. Publicly-traded companies are required to list a summary of their assets and liabilities every quarter on their balance sheet, where accounting rules determine how liabilities are categorized and valued. The opposite of a liability is an asset - something of positive value, or something the company owns.

Types of Liabilities

From an accounting perspective, liabilities are divided into two broad categories:

Current Liabilities

Current liabilities are debts or obligations which are due within a year. Current liabilities are reported on the company's balance sheet and include Short-Term Debt, accrued liabilities and Accounts payable.

  • Short-term bank loans: which are a form of short-term debt that the company takes out.
  • Accounts payable: which is money owed to a company, for a good or service. This includes unpaid bills.

By the principle of prudence, current liabilities are reported in the balance sheet at their least favorable valuation.

Long-Term Liabilities

Long-term liabilities are liabilities that will not be paid off or are not due within a year. Long-term liabilities are also reported on the company's balance sheet and include items such as long-term bank loans and bonds issued by the company. They are generally subject to interest payments. Examples include: company cars, computers and investment in another company.

References

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