Liabilities

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Insurance Journal  Apr 9  Comment 
The Minnesota Supreme Court has ruled that an insurer created by the Legislature does not have to make its records public. The decision ends a two-year legal battle between the Star Tribune and the Minnesota Joint Underwriting Association. The...
The Economic Times  Apr 6  Comment 
"The overall fiscal liabilities of J&K state have increased from Rs 40,265 crore in 2012-13 to Rs 44,673 crore by the end of March 31, 2014," the report said.
Insurance Journal  Apr 1  Comment 
Ski areas are asking the Oregon Legislature for enhanced protection from lawsuits after the state Supreme Court invalidated the broad liability waivers often printed on the back of lift tickets. Ski facility executives told the Senate Judiciary...
Wall Street Journal  Mar 30  Comment 
An McDonald’s attorney told a judge the company is a victim of a union-orchestrated attack, as legal proceedings got under way in a labor dispute that could upend relationship between big retailers and franchisees.
Insurance Journal  Mar 30  Comment 
Nothing is more exciting than reading the latest updates on insurance law, unless, of course, you can get updates on corporate law at the same time. Fortunately, there are two recent Louisiana cases where the outcome of insurance law issues...
Wall Street Journal  Mar 30  Comment 
Lufthansa and its insurer could still face large legal liability claims in the crash of Germanwings Flight 9525 despite indications that the co-pilot who deliberately crashed the plane hid medical problems.
Yahoo  Mar 27  Comment 
Join Midday Movers live now for the latest news on the markets, the economy and the biggest stories of the day.
Insurance Journal  Mar 27  Comment 
Deutsche Lufthansa AG may face unlimited liability for payments to families of victims of the Germanwings jet crashed by its suicidal co-pilot, according to lawyers. “The liability for the victims would be uncapped,” said George Leloudas, a...
Insurance Journal  Mar 20  Comment 
A bill to make it harder to sue condominium builders has cleared its first hurdle in the Colorado Legislature. The measure would make it harder to sue builders of single and multifamily homes for defective construction. It would require that...
MarketWatch  Mar 19  Comment 
Target agreed to pay $10 million to settle a consumer class-action lawsuit in the wake of its 2013 data-breach incident. But that’s only a sliver of the total expenses related to the breach that the company has estimated it will wind up paying out.




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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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