Long-Term Liabilities


DEFINITION of 'Long-Term Liabilities'

In accounting, a section of the balance sheet that lists obligations of the company that become due more than one year into the future. Long-term liabilities include items like debentures, loans, deferred tax liabilities and pension obligations. The portions of long-term liabilities that will come due within the next 12 months are listed under current liabilities, such as the current portion of long-term debt.

BREAKING DOWN 'Long-Term Liabilities'

Separating liabilities into current and long-term liabilities allows analysts to gain a more accurate view of a company's current liquidity position. Typically an analyst would want to see that a company has most of the assets needed to pay for current liabilities in cash or cash equivalent accounts, while the assets needed to satisfy long-term liabilities could be expected to be derived from future earnings or future financing transactions.

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  1. On which financial statements does a company report its long-term debt?

    A company lists its long-term debt on its balance sheet under liabilities, usually under a subheading for long-term liabilities. Long-Term ... Read Full Answer >>
  2. What is the difference between the cash ratio and the solvency ratio?

    The main difference between the cash ratio and the solvency ratio is that the cash ratio is a liquidity measure that only ... Read Full Answer >>
  3. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  4. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  5. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  6. Does working capital include prepaid expenses?

    The calculation for working capital includes any prepaid expenses that are due within one year, since such prepaid expenses ... Read Full Answer >>

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