Financial Times  Jul 17  Comment 
Bungled rights for policemen and firefighters will cost taxpayer £860m
The Hindu Business Line  Jul 16  Comment 
Lenders must trust limited liability partnerships
Insurance Journal  Jul 14  Comment 
W. R. Berkley Corp. announced the creation of Berkley Construction Professional Liability Underwriters to provide professional liability, pollution liability and protective coverages for contractors and project owners across all forms of...
Insurance Journal  Jul 13  Comment 
Amtrak said it will concede that it’s liable for most damages caused by the May 12 train derailment in Philadelphia that killed eight passengers and injured dozens. The railroad acknowledged Friday in responses to two lawsuits that it won’t...
NPR  Jul 9  Comment 
The state's high court ruled that gun dealers must exercise the "highest stand of reasonable care" to keep weapons away from felons.
Insurance Journal  Jul 8  Comment 
Berkshire Hathaway’s MedPro Group has agreed to acquire Oklahoma healthcare liability insurer PLICO Inc., which is owned by the Oklahoma State Medical Association (OSMA). The boards of each entity have approved OSMA’s sale to MedPro of 100...
Insurance Journal  Jul 7  Comment 
AmWINS Group, Inc., a global distributor of specialty insurance products and services, announced today the launch of a new dedicated excess facility designed to meet the rapidly growing demand for cyber liability insurance. “With some domestic...
Forbes  Jun 24  Comment 
If you ever looked closely at a K-1 from a partnership, you might have noticed Section K - Partner's share of liabilities at year end.  The liabilities come in three flavors - nonrecourse, qualified nonrecourse and recourse.  If you haven't ever...


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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