LONG-TERM LIABILITIES

LONG-TERM LIABILITIES

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.)

Bank loans and mortgages are two common examples of long-term liabilities. By convention, the loan installments and mortgage payments made within 12 months count as current liability, and the outstanding debt or mortgage beyond 12 months is long-term liability. With the annual balloon-payment method of loan repayment, the balloon payments due within 12 months become current liability, and the rest long-term liability.

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.

DAFTAR PUSTAKA

http://en.wikipedia.org/wiki/Long-term_liabilities

http://www.brighthub.com/office/finance/articles/86653.aspx