Noncurrent liabilities definition
/What are Noncurrent Liabilities?
Noncurrent liabilities are those obligations not due for settlement within one year. Examples of noncurrent liabilities are the long-term portion of debt payable and the long-term portion of bonds payable.
The aggregate amount of noncurrent liabilities is routinely compared to the cash flows of a business, to see if it has the financial resources to fulfill its obligations over the long term. If not, creditors will be less likely to do business with the organization, and investors will not be inclined to invest in it. A factor to be considered in this evaluation is the stability of an organization's cash flows, since stable flows can support a higher debt load with a reduced risk of default.
Presentation of Noncurrent Liabilities
These liabilities are separately classified in an entity's balance sheet, after current liabilities but before the equity section.
Terms Similar to Noncurrent Liabilities
Noncurrent liabilities are also known as long-term debts or long-term liabilities.