Long-Term Liabilities

Definition: Long-term liabilities (also called non-current liabilities) are obligations that a company does not expect to settle within the next 12 months or i…

Long-term liabilities (also called non-current liabilities) are obligations that a company does not expect to settle within the next 12 months or its normal operating cycle, whichever is longer. They appear on the balance sheet below current liabilities and represent long-duration claims against the company's assets. Common examples include bonds payable, long-term notes payable, mortgage payable, lease liabilities, pension obligations, and deferred tax liabilities. Because these obligations extend beyond one year, lenders typically charge interest that is recognized as an expense over the life of the debt. The current portion of any long-term liability—the amount due within 12 months—is reclassified as a current liability each reporting period.