Month End Glossary

Non-Current Liability

Non-current liabilities are obligations or debts of a business that are not due within the next 12 months.

Non-current liabilities, also known as long-term liabilities, represent a company's financial obligations that are scheduled to be due beyond the next 12 months. These liabilities typically include items such as bonds payable, long-term loans, deferred tax liabilities, and lease obligations. For example, a 5-year bank loan taken by a company for purchasing equipment would be classified under non-current liabilities.

From a financial perspective, non-current liabilities often support a company's long-term assets and growth strategies. They are recorded on the balance sheet and provide insight into the financial structure of an organization. When analyzing a company's financial health, one might evaluate the balance between its non-current liabilities and equity to determine leverage and sustainability.

For instance, "The company has a $300,000 mortgage liability listed in its non-current liabilities section, reflecting its long-term commitment towards financing its office building." Such examples clarify how these liabilities integrate into broader financial reporting or strategies.

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