Long-Term Liabilities
Definition
Obligations due beyond one year, such as long-term loans, bonds, lease liabilities and deferred tax. They finance longer-term assets and are shown separately from current liabilities on the balance sheet.
Related Terms in Core Accounting
Contra Asset
An account that reduces the value of a related asset, carrying a credit balance against the asset's debit balance. Accumulated depreciation and the allowance for doubtful accounts are common examples.
Accumulated Depreciation
The total depreciation charged against a fixed asset since it was acquired. It is a contra-asset account; the asset's cost less accumulated depreciation gives its net book value.
Book Value
The value of an asset or a business as recorded in the accounts — for an asset, cost less accumulated depreciation; for a company, total assets less total liabilities. It can differ significantly from market value.
Salvage Value
The estimated amount an asset is expected to be worth at the end of its useful life. Depreciation is calculated on the cost minus salvage value, so it is spread only over the portion of cost the business expects to consume.
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