What Is A Long-term Liability?
Answers
Answer:
A long-term liability is an obligation resulting from a previous event that is not due within one year of the date of the balance sheet (or not due within the company's operating cycle if it is longer than one year). Long-term liabilities are also known as noncurrent liabilities.
Explanation:
Examples of Long-term Liabilities
Some examples of long-term liabilities are the noncurrent portions of the following:
bonds payable
long-term loans
pension liabilities
postretirement healthcare liabilities
deferred compensation
deferred revenues
deferred income taxes
customer deposits
Some long-term debt that will be due within one year of the balance sheet date can continue to be reported as a long-term liability if there is:
a long-term investment that is sufficient and restricted for the payment of the debt, or
intent and a noncancelable arrangement that assures that the long-term debt will be replaced with new long-term debt or with capital stock.
Free Financial Statemen
Answer:
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Long-term liabilities are financial obligations of a company that become due more than one year. In accounting, they form a section of the balance sheet that lists liabilities not due within the next 12 months including debentures, loans, deferred tax liabilities and pension obligations. The current portion of long-term debt is excluded to provide a more accurate view of a company's current liquidity and the company’s ability to pay current liabilities as they become due.
Long-Term Liability
BREAKING DOWN Long-Term Liabilities
Long-term liabilities are also called long-term debt or noncurrent liabilities. Long-term liabilities are obligations not due within the next 12 months or within the company’s operating cycle if it is longer than one year. A company’s operating cycle is the time it takes an entity to turn inventory into cash.
Exceptions of Long-Term Liability Reporting
An exception to the above two options relates to current liabilities being refinanced into long-term liabilities. If the intent to refinance is present and there is evidence the refinancing has begun, a company may report current liabilities as long-term liabilities because after the refinancing, the obligations are no longer due within 12 months. In addition, a long-term liability that is coming due but has a corresponding long-term investment intended for the payment of the debt is reported as a long-term liability. The long-term investment must have sufficient funds to cover the debt.