What is a long-term liability?
Definition of a long-term liability
A long-term liability is money that your business owes which it will have to pay in more than a year's time.
Examples of a long-term liability:
If your business has a bank loan, or a mortgage, then part of this will appear in current liabilities - the part that's due within a year - and part will be long-term liabilities.
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If your business is a limited company, you will find its long-term liabilities are called "Creditors; amounts falling due in more than 1 year" in its statutory accounts filed with Companies House.
Where to find your long-term liabilities
Long-term liabilities appear on a business's balance sheet. FreeAgent's accounting software automatically generates balance sheets from your data so you and your accountant can stay on top of your long-term liabilities.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.