Long-term liabilities
Encyclopedia
Long-term liabilities are liabilities with a future benefit over one year, such as notes payable that mature longer 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 loan
s and other bank loan
s. (Note: Not all bank loans are long term as not all are paid over a period greater than a year, an example of this is a 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: the first $1000 would be classified as a current liability, and the second $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).
Also "long-term liabilities" are a way to show that you have to pay something off in a time period longer 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 loan
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
s and other bank loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s. (Note: Not all bank loans are long term as not all are paid over a period greater than a year, an example of this is a 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: the first $1000 would be classified as a current liability, and the second $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).
Also "long-term liabilities" are a way to show that you have to pay something off in a time period longer than one year.