Long-Term Liabilities

Abstract

The purpose of this study is to test about a long-term liabilities that are expected to be paid after a year or more using the result of other long-term liabilities structures. Long-term liabilities (also called non-current liabilities) are financial obligations of a company that are due after a year or more. Long-term liabilities are presented on a balance sheet of a company together with current liabilities which represent payments due within one year. Classification of liabilities into current and non-current is important because it helps users of the financial statements in assessing the financial strength of a business in both short-term and long-term. While information about current liabilities of a company (together with its current assets) provide vital information about liquidity of a company, long-term liabilities (together with non-current assets) are critical for assessment of its long-term solvency.