Liabilities

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Insurance Journal  Jun 22  Comment 
Aspen U.S. Insurance said that Grace Fortune has joined as senior vice president and product line leader for Products Liability. Reporting to Roxanne Mitchell, executive vice president for Aspen U.S. Casualty, Fortune will be based in Chicago. She...
The Hindu Business Line  Jun 19  Comment 
Allying concerns of American business community and investors, Finance Minister Arun Jaitley has said that any decision which is retrospective and creates fresh liabilities is not accepta...
newratings.com  Jun 18  Comment 
UET United Electronic Technology AG reduces liabilities as further restructuring measure UET United Electronic Technology AG / Key word(s): Miscellaneous/Miscellaneous 18.06.2015 09:30 Dissemination of a Corporate News, transmitted by DGAP - a...
Insurance Journal  Jun 16  Comment 
The Hartford has launched a new professional liability insurance offering to help protect small businesses in the event they are sued by a customer claiming a negligent act, or error or omission in the professional services they provide. This new...
Insurance Journal  Jun 15  Comment 
ACE Group has launched a new insurance offering that combines domestic general liability coverage and international general liability coverage for U.S. middle-market companies that are expanding globally. The policy brings together underwriting of...
Forbes  Jun 9  Comment 
In a matter of first impression, the Ninth Circuit held that, in considering whether to regard a transaction under the first part of the Stern test, a court “must consider the relevant subjective and objective factors to determine whether the...
Insurance Journal  Jun 9  Comment 
Berkshire Hathaway Specialty Insurance (BHSI) has introduced Executive First™ Fiduciary Liability Insurance, a new policy designed to provide straightforward, up-to-date protection for Canadian sponsors of large pension and benefit plans and...
Insurance Journal  Jun 1  Comment 
The Elgin City Council in Illinois has approved rules that make it legal for Uber and other ride-hailing services to operate in the city. The (Arlington Heights) Daily Herald reports the Elgin ordinance mirrors a state law taking effect today....
Insurance Journal  Jun 1  Comment 
Forest managers would prefer to use prescribed burns every few years to help prevent costly wildfires and rebuild unhealthy ecosystems, but hurdles like staffing, budget, liability and new development hinder them, a new University of Florida study...




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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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