Motley Fool  Nov 22  Comment 
With a little extra information, calculating net income from the balance sheet using only assets, liabilities, and equity should be simple enough. Here's how to calculate net income with three examples.
Insurance Journal  Nov 20  Comment 
RLI Insurance Co.’s RLI Executive Products Group has enhanced its Executive Plus Side A Difference in Conditions (DIC) Directors & Officers Liability policy. The Executive Plus policy protects the personal assets of directors and officers when...
Insurance Journal  Nov 17  Comment 
RLI Insurance Co.’s Executive Products Group has created a new Representations and Warranties Liability Insurance policy. RLI’s new Representations and Warranties Liability policy offers protection to buyers and sellers involved in corporate...
The Economic Times  Nov 15  Comment 
As part of the opening up announced on November 10, foreign direct investment (FDI) through the automatic route has been allowed in LLPs.
New York Times  Nov 13  Comment 
Home rental sites, including HomeAway, do not have the same insurance and safety requirements as hotels, although Airbnb recently improved its coverage.
Insurance Journal  Nov 11  Comment 
Berkshire Hathaway Specialty Insurance (BHSI) has expanded its construction-focused capabilities with the introduction of the Homebuilders Liability Insurance Policy, which extends flexible protection for tract homebuilders nationwide. Bill...
Insurance Journal  Nov 10  Comment 
V3 Insurance Partners LLC has launched a new management liability package program, Vantage Point, for private companies and not-for-profit organizations. Vantage Point is a flexible insurance package created specifically for small- to mid-sized...
Insurance Journal  Nov 9  Comment 
Forrest T. Jones & Company (FTJ) has completed an agreement with Liberty International Underwriters (LIU) to serve as the program administrator for LIU’s national accountants’ professional liability insurance program for accounts with annual...


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.


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