Insurance Journal  6 hrs ago  Comment 
The Arizona Supreme Court says state law can shield governments from lawsuits over alleged unsafe highways but that the protection only applies if the public is warned about dangerous hazards. The justices ruled Friday that the state and its local...
Insurance Journal  May 8  Comment 
Companies in Alabama would be protected from lawsuits related to products they didn’t make under newly passed legislation. Gov. Robert Bentley on Friday signed into law a bill that says manufacturers are not liable for damages from products they...
Insurance Journal  May 6  Comment 
Legislation to make Colorado public schools legally liable for student safety awaits the governor’s signature. The state House and Senate agreed Monday on final language in the bill to allow public schools to be sued for negligence in cases of...
The Hindu Business Line  May 5  Comment 
After exiting SpiceJet in 2010, Ajay Singh is back to bail out the troubled airline. In an interview with Ashwini Phadnis, Singh talks about his first stint, links with the BJP and confidence in the company. Excerpts:
Insurance Journal  May 4  Comment 
Legislation to make Colorado public schools legally liable for student safety has been approved by the state House after an emotional debate. The bill has already cleared the Senate and appears likely to head to the governor’s desk. If the...
Insurance Journal  May 4  Comment 
London-based QBE European Operations, which is part of QBE Insurance Group, has appointed Thomas Huber to lead the expansion of its European liability portfolio. Huber has joined as head of European liability with responsibility for developing...
Insurance Journal  May 1  Comment 
Kinsale Insurance Co. has launched a new law enforcement/police professional product. Eligible accounts include boroughs, cities, counties, townships and villages’ law enforcement departments serving populations of 100,000 or less. Larger venues...
Insurance Journal  Apr 29  Comment 
A long-awaited bill to make it harder to sue Colorado homebuilders for defective construction has failed in the Colorado legislature. The bill was rejected Tuesday by a House committee controlled by Democrats. The measure would have revised...
Insurance Journal  Apr 24  Comment 
Horse owners and private air strip operators in Michigan would be exempt from liability in certain cases where people are injured under two bills that have moved through the Republican-controlled House. One bill, passed by a 79-31 vote, would add...
Insurance Journal  Apr 23  Comment 
Colorado lawmakers choked back tears and recalled the state’s painful history of school violence Tuesday as they advanced a plan intended to reduce school shootings by making public schools legally liable for student safety. The approval of the...


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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