Liabilities

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Insurance Journal  1 hr ago  Comment 
V3 Insurance Partners LLC  has enhanced its workers’ compensation program, adding National Liability & Fire Insurance Co., a Berkshire Hathaway Group company, as a new market. Now available in additional states with more class codes, V3iConnect...
Forbes  Dec 18  Comment 
By Cindy S. Minniti, Mark S. Goldstein, and Kimberly M. Mitchell
Insurance Journal  Dec 18  Comment 
XL Group’s Professional Liability arm has released a new Executive and Corporate Securities Liability policy form to protect companies and their directors and officers from what it terms “an increasingly complex litigation and regulatory...
Insurance Journal  Dec 17  Comment 
The owners of a multistate chain of nursing homes may have committed fraud by transferring liabilities to a shell company that later lost more than $2 billion in jury verdicts to families who claimed relatives died of neglect, a federal … The...
Insurance Journal  Dec 17  Comment 
OneBeacon Insurance Group Ltd. has sold the renewal rights to its lawyers professional liability business to Argo Group US, Inc., a member of Argo Group International Holdings Ltd. The transaction includes renewal rights to policies renewing on or...
Benzinga  Dec 16  Comment 
ISO is preparing insurers for the rise of commercial drones around the world by offering new and versatile coverage options. ISO is a Verisk Analytics (Nasdaq: VRSK) business. The new endorsements address the growing liability exposures...
Insurance Journal  Dec 12  Comment 
Garlock Sealing Technologies LLC, the EnPro Industries Inc. unit that filed Chapter 11 in June 2010 to address asbestos claims, won a long-fought battle with personal-injury claimants when their request to reopen the record of a trial estimating...
BusinessWeek  Dec 8  Comment 
The Supreme Court just made it painfully clear that BP has backed itself into a dangerously vulnerable position in the Gulf of Mexico spill-liability wars
New York Times  Dec 5  Comment 
The home-sharing business now has secondary coverage, which kicks in after a homeowner’s primary insurance.
Yahoo  Dec 4  Comment 
UBS said on Thursday it will set up a separate group asset and liability unit to help it manage risk in the bank's new structure, which ensures it can be broken up more easily in case of a renewed crisis. ...




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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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