Liabilities

RECENT NEWS
Insurance Journal  56 min ago  Comment 
The Public Entity Division of Kinsale Insurance Company is now offering public official liability coverage that provides for damages and defense costs for wrongful acts alleged against a public entity, an elected or appointed public official, or...
guardian.co.uk  11 hrs ago  Comment 
Pensions Regulator publishes report into how tycoon was pushed into agreeing to pay £363m to rescue retailer’s scheme Sir Philip Green was pushed to pay into BHS’s pension after the industry regulator found the “main purpose” in selling...
Insurance Journal  Jun 27  Comment 
Chubb has appointed Leigh Anne Sherman to lead its Private/Not-For-Profit Management Liability business within the North America Financial Lines division. Sherman will have overall responsibility for leading the unit’s retail business, which...
MarketWatch  Jun 26  Comment 
Hartford Financial Services said Monday has reduced its pension liabilities by $1.6 billion through a deal with Prudential Financial Inc. . That represents 29% of the $5.6 billion in the insurer's U.S. qualified pension plan liabilities. As a...
The Hindu Business Line  Jun 25  Comment 
Do not expect any compensation for theft or burglary of valuables in safe deposit boxes of public sector banks as the locker hiring agreement absolves them of all liability. This bitter truth was ...
Insurance Journal  Jun 23  Comment 
Randall & Quilter Investment Holdings Ltd. announced it has reached agreement to sell the entire share capital of its Lloyd’s managing agency, R&Q Managing Agency Ltd. (RQMA), to Coverys, a provider of medical professional liability insurance...
Insurance Journal  Jun 21  Comment 
Arthur J. Gallagher’s specialist Management Liability Practice has responded to the heightened risk of commercial crime facing SME businesses by creating tailor-made management liability and crime insurance products. The two products are...
Insurance Journal  Jun 19  Comment 
Travelers Insurance Co. Ltd. in the UK has launched a new online system that enables UK brokers to receive management liability quotes and bind coverage for their clients in a matter of minutes. Accessed through the My Travelers e-trade platform, …
Insurance Journal  Jun 13  Comment 
National professional liability and management liability wholesale brokerage, Founders Professional, has added Adrienne Porter to its Miscellaneous Professional Liability team. Porter will be joining the team in St. Petersburg, Fla., as a broker...




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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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