Liabilities

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The Hindu Business Line  9 hrs ago  Comment 
Reserve Bank of India will soon be announcing customer liability framework to help resolve cyber fraud cases. “This will help in deciding the levels of liability for a customer and bank in the event ...
Insurance Journal  Jun 21  Comment 
The Supreme Court is supposed to take appellate cases to make the law clearer. Last week’s opinion on healthcare fraud had the opposite effect. Instead of spelling out exactly when a misrepresentation in healthcare billing counts as a legal...
guardian.co.uk  Jun 20  Comment 
More than 2,000 jobs at risk as bosses of convenience stores, bought from supermarket group, consider its options Morrisons is facing a potential liability of up to £20m as My Local, the group that bought the Bradford-based group’s convenience...
Insurance Journal  Jun 20  Comment 
A case in Connecticut state court could help victims from mass shootings — including the recent massacre in Orlando — sue manufacturers of military style assault rifles used in the attacks, despite state and federal laws granting them...
TechCrunch  Jun 16  Comment 
 While we are many years away from an autonomous utopia, where cars pick us up and drive us where we need to go without a human at the wheel, we are seeing the first steps toward self-driving cars. Volvo, Honda, Audi, Tesla—pretty much every...
The Economic Times  Jun 14  Comment 
In addition to the disputed tax demands, the firm also listed the Rs 6,227 crore claim by Epic Systems Corp as a contingent liability for the fiscal 2015-16.
The Hindu Business Line  Jun 11  Comment 
The BJP-led new Assam government has inherited Rs 10,000 crore liabilities from the previous Congress regime, Chief Minister Sarbananda Sonowal said and sought Central assistance to tide over the cri...
Insurance Journal  Jun 8  Comment 
A small community in Louisiana disbanded its troubled police force more than a year ago, but the town hasn’t shaken a scandal that fueled the department’s collapse and ousted its elected police chief. A federal judge ruled on June 5 …
Insurance Journal  Jun 8  Comment 
A California waste management company at the center of a closely watched case told a U.S. appeals court on Tuesday that the new U.S. labor board standard for “joint employment” is so broad and vague that it makes it impossible …
newratings.com  Jun 6  Comment 
Marenave Schiffahrts AG: Letter of Intent of financing banks on sale of the entire fleet and release of Marenave Schiffahrts AG from liability Marenave Schiffahrts AG / Key word(s): Letter of Intent/Banking Syndicate 06.06.2016...




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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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