Long-Term Liabilities

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Spontaneous Liabilities

    Liabilities of a company that are accumulated automatically as ...
  3. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  4. Liability

    A company's legal debts or obligations that arise during the ...
  5. Lease

    A legal document outlining the terms under which one party agrees ...
  6. Interest Sensitive Stock

    Any stock with a price that is extremely sensitive to changes ...
RELATED FAQS
  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. What happens to the company stock if a subsidiary gets spun off?

    When a subsidiary gets spun off, the company's stock tends to drop. However, the investor in the stock does not lose any ... Read Full Answer >>
  4. How is minimum transfer price calculated?

    A company that transfers goods between multiple divisions needs to establish a transfer price so that each division can track ... Read Full Answer >>
  5. What Book Value Of Equity Per Share (BVPS) ratio indicates a buy signal?

    Book value of equity per share (BVPS) is a ratio used in fundamental analysis to compare the amount of a company's shareholders' ... Read Full Answer >>
  6. What is the effective interest method of amortization?

    The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  2. Economics

    Calculating Net Realizable Value

    An asset’s net realizable value is the amount a company should expect to receive once it sells or disposes of that asset, minus costs from its disposal.
  3. Stock Analysis

    3 Stocks To Buy and Hold For the Rest of 2015

    One of the dominant themes to consider for 2015 is the normalization of monetary policy as the Fed raises interest rates.
  4. Fundamental Analysis

    Are Fast-Casual Restaurants Overvalued?

    Can fast-casual restaurants actually grow to the levels that investors believe they can?
  5. Investing Basics

    Calculating Unlevered Free Cash Flow

    Unlevered free cash flow (UFCF) is the free cash flow of a business before interest payments.
  6. Taxes

    Understanding Write-Offs

    Write-off has different meanings depending on the context in which it is used, but generally refers to a reduction in value due to expense or loss.
  7. Economics

    What are Capital Goods?

    Capital goods are assets with a useful life of more than one year that are used for the production of income.
  8. Economics

    Understanding Capital Assets

    A capital asset is one that a company plans on owning for more than one year, and uses in the production of revenue.
  9. Entrepreneurship

    Samsung and Google: A Beautiful Friendship?

    Google and Samsung have more than a hardware/software relationship. These two technology giants have collaborated time and again to define mobile's future.
  10. Personal Finance

    How The NFL Makes Money

    The National Football League is the most successful sports league in the world. How does the NFL make money, and what is its strategy to stay on top?

You May Also Like

Hot Definitions
  1. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  2. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  3. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  4. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  5. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  6. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!