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 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, 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.
Ø Type-type of LONG TERM LIABILITIES
1. LOANS FROM FINANCIAL INSTITUTION (INCLUDING BANK):
o
Loan
o
Mortgage Payable NOTES
o
Debt Bond (BOND payable)
o
Leasing debt
o
Other long term liabilities
