The accounts of a company can be a complex and difficult task for one who is not accustomed to manage their concepts, but it is indispensable for the proper functioning of a company. Depending on how are made annotations of an accounting period a financial situation or another, can reach if by poor accounting might believe that the company works perfectly when in reality it is ruining it will come off.
What is the liability of a company?
Popularly it is said that the liability is anything that the company should and largely have every reason, however it would be more accurate to say that the liability is the origin of the asset, ie what the company should because of having invested in assets. While the assets of a company are all property and financial rights that the organization has liabilities are all obligations and liabilities with respect to third parties, whether what you owe to banks suppliers or employees themselves.
The obligation in a contract replenishes cash or other financial asset to another company or bank. A derivative contract that will be or may be settled, but that this settlement is not made from the exchange of a fixed amount but from the change of a fixed number of its own equity instruments as could be the actions.
Classification of liabilities
Liabilities are classified according to the changeability at the time of its obligations, ie according to how soon the deadline for payment. Thus, what we call the liabilities, all debts that the company has over other natural and legal persons, whether banks, suppliers, employees and other creditors are divided into two groups depending on when you need to make effective the payment:
Long term: The long-term liabilities or non current liabilities are all those obligations, which the company has to take care that, will expire beyond 12 months. Short term: Short-term liabilities or liability is all debts that the company must face in a period less than 12 months. In many places, you can read or hear about non current liabilities.
It is very common mistake to consider the initial capital or equity as part of the liability. As we have seen in the definition given international accounting standards, the liability is clear from a contract or obligation, while the initial capital used to lift the company does not have to repay anyone, since it already owns and if he should be lost only assume those losses.
Although it is true that the two share rationale, are intended to cover the cost of the assets, the obligation to respond to others is what differentiates them. This money used in the construction of the company which is the net worth which is also called equity, can be obtained by a simple operation subtracting assets and liabilities ie, if we subtract the debts and obligations of the company to its assets and property leave us own funds that started the company.