Insurance Journal  Apr 4  Comment 
The Maryland Senate has approved a compromise bill on liability for dog bites. The House has already passed the bill, so it will go to the governor’s office for a signature. The bill would hold dog owners liable for biting … The article...
Insurance Journal  Apr 3  Comment 
Allied World U.S. has launched Privacy//403 SRVS, a Specified Response Vendor Solution (SRVS) policy to provide coverage for liability and expenses associated with the compromise of sensitive information and information systems, in the event of a...
Insurance Journal  Apr 3  Comment 
Farmers wouldn’t be financially liable for the death of someone participating in an agricultural tourism activity under a bill that has cleared the Wisconsin Senate. Agricultural tourism is growing in popularity as farmers and others look for...
Reuters  Apr 3  Comment 
Delphi Automotive's name does not appear on the outside of the 2.6 million vehicles recalled by General Motors Co since February, but the company is getting drawn into a mounting wave of litigation for its role in producing the faulty ignition...
DailyFinance  Apr 1  Comment 
22nd Century Group, Inc. (NYSE MKT:XXII) today announced that the Company entered into warrant amendments yesterday with existing warrant holders to eliminate virtually all of the Company’s “derivative warrant...
DailyFinance  Apr 1  Comment 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/01/14 -- Government liabilities include much more than direct debt, and when all federal, provincial, and local government liabilities are combined, each Canadian taxpayer owes $243,476, notes a...
Insurance Journal  Mar 31  Comment 
A pair of Oklahoma legislators says businesses, schools and churches that open their doors to passers-by during violent weather should be spared liability if their temporary guests are hurt or killed. A bill by Rep. Larry Glenn, R-Miami, would...
The Economic Times  Mar 28  Comment 
The net IIP or the difference between the nation's external financial assets and liabilities, deteriorated on the back of rise in the value of foreign-owned assets in the country.  Mar 26  Comment 
HANSA GROUP AG concludes an agreement to reduce the financial liabilities DGAP-News: Hansa Group AG / Key word(s): Agreement/Capital Reorganisation HANSA GROUP AG concludes an agreement to reduce the financial liabilities 26.03.2014 /...
BusinessWeek  Mar 25  Comment 
If General Motors did quietly replace an ignition switch in 2006, the procedural failure could add $250 million to its total settlement bill


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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