The concept of liability refers to the set of debts that a has. Thus, the liability is collected in the situation balance of any entity and therefore is the result of those obligations of the company that have been the result of its financial activity.
In these cases, the accounting liability refers to the financing received by a company through a creditor, for example the taxes to which it pays or the payment to the banks or the payment of the wages of its workers.
How the liabilities of a company are classified
The liabilities of a company derive as a result of its obligations, be they long or short term. Therefore, the classification of the liability is divided according to the estimated time for payment:
- Callable liability: also called current liabilities. It is all that financing outside the company, the Suppliers. This type of liability is short-term when the obligations mature in one year and long-term when they mature in a period of more than one year.
- Non-callable liability: it is known as non-current liabilities. In this case, it is the equity that the company owns and that comes directly from the reservations and capital. These funds usually find their origin in the shareholders.