Liabilities

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SeekingAlpha  3 hrs ago  Comment 
By Unconventional Capital Wisdom: As we anticipated, the pension liability was inflated due to the discount rate when we originally wrote about Resolute Forest Products (NYSE:RFP). The pension liability continues to decrease from $1.9 billion in...
Forbes  Aug 18  Comment 
By Remy Kessler and Ian A. Wright On August 12, 2014, the California court of appeal issued a sweeping decision that may spark a new wave of class action lawsuits against California employers.  In Cochran v. Schwan’s Home Service, Inc., the...
Insurance Journal  Aug 18  Comment 
Brand-name drug makers can be held liable for warnings on a generic medication even if it was produced by another company, the Alabama Supreme Court ruled Friday, standing by an earlier decision that business leaders viewed as a defeat. The...
Insurance Journal  Aug 12  Comment 
Beecher Carlson Insurance Services LLC named Paula Robertson-Miller senior vice president of its West Coast executive liability brokerage. Robertson-Miller will report Jeffrey Lattmann, the national executive liability practice leader....
WA Business News  Aug 12  Comment 
Shares in junior oil and gas explorer Neon Energy have surged over 70 per cent on the news that the company had agreed to pay $US5.75 million to its Vietnamese joint venture partners, settling financial liabilities.
Mondo Visione  Aug 11  Comment 
The Securities and Exchange Commission today announced securities fraud charges against the state of Kansas stemming from a nationwide review of bond offering documents to determine whether municipalities were properly disclosing material pension...
Insurance Journal  Jul 31  Comment 
Under Democratic President Barack Obama, the U.S. National Labor Relations Board has been taking a stance on workplace relations that has employers, industry groups and Republican lawmakers voicing alarm. NLRB General Counsel Richard Griffin...
Insurance Journal  Jul 28  Comment 
Berkshire Hathaway Specialty Insurance (BHSI) has entered the fiduciary liability market and named Rhonda Prussack as vice president, Fiduciary Liability, to lead the effort. According to Dan Fortin, senior vice president, Executive and...




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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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