Liabilities

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New York Times  Feb 8  Comment 
The decision is a rebuke of the Trump Organization and could result in millions of dollars in added costs for the company.
Insurance Journal  Feb 6  Comment 
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Insurance Journal  Feb 2  Comment 
Global specialty insurer The Navigators Group Inc. has appointed Jacob Ingerslev to the newly created position of global practice leader for cyber liability. Ingerslev will be responsible for leading Navigators’ cyber liability practice,...
OilVoice  Feb 1  Comment 
Service companies are on alert with more than $2 billion in LLR-related costs currently accruing aga ...




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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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