Liabilities

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Insurance Journal  10 hrs ago  Comment 
NAS Insurance Services has enhanced its NetGuard Plus cyber liability product. The new coverage features offer greater protection for emerging privacy and security threats for businesses of all sizes across a range of industries. The enhancements...
Insurance Journal  May 17  Comment 
XL Catlin’s design professional insurance business has increased the limits of its smartADVANTAGE professional liability insurance policy and improved policy terms for architectural and engineering firms in the U.S. with annual fees of $2...
Financial Times  May 12  Comment 
Bribery Act to be extended in fresh clampdown on corruption
Insurance Journal  May 11  Comment 
The specialty medical professional liability (MPL) insurance industry remained profitable in 2015, however its net income fell nearly 36.6 percent to almost $1.1 billion in 2015. In a special report, A.M. Best said the MPL segment’s results were...
Insurance Journal  May 10  Comment 
Anesthesia Business Consultants (ABC), a provider of billing and practice management for anesthesia and pain management specialists, has created a new insurance program for clients. Developed by Arthur J. Gallagher & Co. for ABC clients, the...
The Hindu Business Line  May 5  Comment 
Lok Sabha passes Finance Bill post amendments
Insurance Journal  May 4  Comment 
Liberty International Underwriters (LIU) has named Casey Hartley as U.S. General Liability product line leader. Based in Atlanta, Miss., Hartley will have responsibility for the technical underwriting, portfolio performance and overall product...
Automotive World  May 2  Comment 
The automotive industry must prepare for lawsuits that hinge on algorithms and analytics. By Jonathan Judge The post Computers take the wheel, and new liability ensues appeared first on Automotive World.
Insurance Journal  May 2  Comment 
National Football League executives may for the first time have to testify about what they knew of concussion risks after a judge cleared the way for questions from insurers who are suing to avoid paying more than $1 billion in …
Insurance Journal  Apr 29  Comment 
QBE North America has promoted John Burkhart to senior vice president and head of Management Liability & Professional Lines (MLPL). In this newly created role, Burkhart will assume responsibility for QBE North America‘s entire Specialty MLPL...




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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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