Long-term liabilities definition
/What are Long-Term Liabilities?
Long-term liabilities are those obligations of a business that are not due for payment within the next twelve months. This information is separately reported, so that investors, creditors, and lenders can gain a better understanding of the obligations that a business has taken on. These obligations are usually some form of debt; if so, the terms of the debt agreements are typically included in the disclosures that accompany the financial statements. Deferred tax liabilities, deferred compensation, and pension obligations may also be included in this classification.
Presentation of Long-Term Liabilities
All line items pertaining to long-term liabilities are stated in the middle of an organization’s balance sheet. Current liabilities are stated above it, and equity items are stated below it.
Terms Similar to Long-Term Liabilities
Long-term liabilities are also known as noncurrent liabilities and long-term debt.