Liabilities
Liabilities represent the company’s obligations to others (Exhibit 6.12). To qualify as a liability, an obligation must be measurable and its occurrence probable.
| Accounts Payable | A company’s obligations to suppliers for services and products already purchased from them, but which have not been paid; represent the company’s unpaid bills to its suppliers for services obtained on credit from them. |
| Notes Payable | Debt or equity securities held by the company |
| Current Portion of Long-Term Debt | Portion of debt with an overall maturity of more than a year; portion due within 12 months |
| Long-Term Debt | The company’s borrowings with a maturity (full repayment) exceeding 12 months |
| Deferred Taxes | Potential future tax obligations arising when taxes payable to the IRS are lower than those recorded on financial statements |
| Minority Interest | Equity interest in the portion of the consolidated businesses that the company does not own |
Liabilities represent obligations stemming from a company’s:
Operating activities
Financing activities
Liabilities generally possess the following characteristics:
They are obligations that will be met through the use of cash, goods, or services.
The transactions from which these obligations arise have taken place.
On the balance sheet, liabilities are divided into two categories:
Current liabilities
Due within one year
Reported in order of maturity, by amount, or in the event of liquidation
Long-term liabilities
Obligations not due within a year
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