Long-Term Liabilities

Loading the player...

What are 'Long-Term Liabilities'

Long-term liabilities, in accounting, form part of 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.

RELATED TERMS
  1. Other Long-Term Liabilities

    A balance sheet item that includes obligations which are not ...
  2. Total Liabilities

    The aggregate of all debts an individual or company is liable ...
  3. Other Current Liabilities

    A balance sheet entry used by companies to group together current ...
  4. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Limited Liability

    A type of liability that does not exceed the amount invested ...
Related Articles
  1. Economics

    Explaining Long-Term Liability

    A long-term liability is an obligation a company owes a year or more into the future.
  2. Forex Education

    4. Learn The Different Liabilities

    Learning to read the balance sheet can provide great insight into the financial strength of a company.
  3. Professionals

    Balance Sheet Components - Liabilities

    CFA Level 1 - Balance Sheet Components - Liabilities. Learn about the different types of liabilities. A top down approach into the components of long-term and current liabilities.
  4. Professionals

    Current Liability Basics

    CFA Level 1 - Current Liability Basics. Learn the basic types of liabilities, including definitions for current and long-term liabilities, warranties, taxes and vacation-pay.
  5. Investing

    What's a Liability?

    A liability is a debt. It is an obligation that arises during the course of business and represents a third-party claim on the company's assets. A liability can arise in a number of different ...
  6. Professionals

    Liabilities

    CFA Level 1: Section 9 - Liabilities
  7. Investing

    Current Liabilities

    Current Liabilities are company debts due within one year or one operating cycle, whichever is greater. An operating cycle is the time it takes a company to purchase inventory and convert it ...
  8. Investing Basics

    Explaining Noncurrent Liabilities

    Noncurrent liabilities are financial obligations a company owes a year or more into the future.
  9. Professionals

    The Balance Sheet

    Find out how to read this financial statement, and what it says about a company.
  10. Professionals

    Client Balance Sheet

    FINRA Series 7 - Customer balance sheet
RELATED FAQS
  1. What is the difference between an expense and a liability?

    Learn what liabilities and expenses are, which financial statements they are listed on, and the differences between liabilities ... Read Answer >>
  2. On which financial statements does a company report its long-term debt?

    Discover which financial statements are used to report a company’s long-term debt, as well as how a company uses debt to ... Read Answer >>
  3. What kinds of liabilities appear on the balance sheet?

    Learn what current and non-current liabilities are, the difference between the two, and examples of liabilities that a company ... Read Answer >>
  4. What are some examples of current liabilities?

    Examine some common examples of current liabilities a company may owe within a year or less in order to accurately assess ... Read Answer >>
  5. How might a company's contingent liabilities affect its share price?

    Discover what contingent liabilities are, and how and to what extent such liabilities may have an impact on a company's share ... Read Answer >>
  6. How are accounts payable listed on a company's balance sheet?

    Find out how accounts payable is listed on a company's balance sheet, why it is considered a current liability, and how it ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center