Liabilities

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OilVoice  Apr 27  Comment 
Rose Petroleum plc the AIMquoted AIM ROSE natural resources company is pleased to provide an operational update on the current activities taking place within both its Oil and Gas and Mining divi
Insurance Journal  Apr 21  Comment 
The California Supreme Court has granted review to consider when and if evidence of industry custom and practice is admissible in a strict products liability action. In Kim v. Toyota Motor Corp. plaintiff William Jae sued Toyota for injuries Kim …
The Economic Times  Apr 17  Comment 
Nuclear Power Corporation of India Ltd (NPCIL) is confident of getting the public liability insurance policy in 10-15 days time, said a senior official.
The Times of India  Apr 16  Comment 
The financial assets of Indian residents, including what the rest of the world owes Indians and gold bullion held as reserve assets, have more than doubled in the last decade. It is, however, interesting to note that the claims of nonresidents on...
Insurance Journal  Apr 15  Comment 
Berkley FinSecure, a W. R. Berkley Company, has enhanced its management liability coverage for policyholders with the electronic banking option to include access to CYBER Carry*Thru, powered by NetDiligence. CYBER Carry*Thru is a private...
The Economic Times  Apr 12  Comment 
India has changed its accounting standards from GAAP to Ind-AS, which is on a par with International Financial Reporting Standards (IFRS), from April 1 this year.
Insurance Journal  Apr 8  Comment 
Allianz Commercial* announced it has increased its capacity for excess of loss cover, which will now allow brokers to purchase excess liability cover up to £50 million ($70.5 million) per individual class of business. The move, which supports...
Insurance Journal  Mar 23  Comment 
Chicago-based insurer, CNA, appointed David Lim as assistant vice president, management liability zone leader for the Northern Zone. In this role, Lim is responsible for providing overall underwriting expertise for the public and private...
Insurance Journal  Mar 18  Comment 
General Star Management Co. has launched a trio of specialized product liability coverages called “Encore!” designed to protect manufacturers, importers and distributors from product liability exposures arising out of discontinued products,...
Wall Street Journal  Mar 15  Comment 
A federal housing agency on Tuesday said it would make it easier for banks to avoid steep penalties for some errors committed during the mortgage process, in a bid to spark lending to less-creditworthy borrowers.




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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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