Long-term liabilities

Recorded on the balance sheet, a company's liabilities for leases, bond repayments and other items due in more than one year.

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A company's long-term liabilities are accounted for by its debt obligations to other parties which last longer than one year.

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Any monies owed that are not payable on demand or within one year. The current portion of long-term debt is a current liability, as distinguished from a long-term liability.

Obligation payable in money, goods, or services for a period in excess of one year. It is presented under noncurrent liabilities in the balance sheet. Examples are mortgage payable and the noncurrent portion of warranties payable.

Long-term liabilities are liabilities with a future benefit over one year, such as notes payable that mature greater than one year.

In accounting, the long-term liabilities are shown on the right wing of the balance-sheet representing the sources of funds, which are generally bounded in form of capital assets.

Examples of long-term liabilities are debentures, mortgage loans and other bank loans (note: not all bank loans are long term as not all are paid over a period greater than a year, the example is bridging loan.)

By convention, the portion of long-term liabilities that must be paid in the coming 12-month period are classified as current liabilities. For example, a loan for which two payments of $1000 are due, one in the next twelve months and the other after that date, would be 'split' into two: $1000 would be classified as a current liability, and $1000 as a long-term liability (note this example is simplified, and does not take into account any interest or discounting effects, which may be required depending on the accounting rules).

See also

• Fixed liability
• Creditor falling due after more than one year

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