Liabilities

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Insurance Journal  11 hrs ago  Comment 
Cybersecurity is the biggest concern for companies evaluating risk in the nascent self-driving vehicle industry, according to a survey conducted by Munich Re. The world’s second-biggest reinsurer found that 55 percent of corporate risk managers...
Insurance Journal  Jul 19  Comment 
Specialty underwriter and program administrator Business Risk Partners (BRP) has launched an excess management liability facility backed by Great American Insurance Group. The facility will provide up to $5 million in capacity, available...
Insurance Journal  Jul 19  Comment 
Berkshire Hathaway Specialty Insurance (BHSI) reported that it has expanded into Transactional Liability Insurance team in the U.S. and Canada and named Robert Underhill as senior vice president, head of Transactional Liability. The company also...
Insurance Journal  Jul 19  Comment 
DuPont Co. and Dow Chemical Co. must tell shareholders before next week’s merger vote that they may face exposure to costly potential damages from claims that a chemical used to make Teflon caused cancer and other ailments, community activists...
Insurance Journal  Jul 19  Comment 
Berkshire Hathaway subsidiary National Indemnity Co. is acquiring Medical Liability Mutual Insurance Co. of New York for an undisclosed price. The deal comes as the insurer completes its conversation from a mutual company to a stock insurer. The...
Reuters  Jul 18  Comment 
Medical Liability Mutual Insurance Co (MLMIC) said it agreed to be bought by Berkshire Hathaway Inc's unit National Indemnity Co.
Insurance Journal  Jul 18  Comment 
BP Plc has raised the total liability from the Deepwater Horizon oil disaster, which triggered the worst offshore oil spill in U.S. history, by $5.2 billion to $61.6 billion before tax. The London-based company expects to take a $2.5 billion …
Financial Times  Jul 17  Comment 
£85bn extra gap raises fears over mounting deficits
Automotive World  Jul 14  Comment 
BP announced today that following significant progress in resolving outstanding claims arising from the 2010 Deepwater Horizon accident and oil spill, it can now reliably estimate all of its remaining material liabilities in connection with the...
Insurance Journal  Jul 13  Comment 
Portland. Ore.-based ID Experts has named Kimberly Holmes senior vice president and counsel in cyber insurance, liability and emerging risks. Holmes will be responsible for overseeing cyber and insurance litigation developments, as well as the...




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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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