Liability: A Likely Future Sacrifice Of Obligations

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A liability is a likely future sacrifice of obligations or economic resources coming from past transactions and payable in assets and/or services in the future. A liability can be considered as current if the obligation has to be met in less than one year or by the company's operating cycle. This is decided by whichever is longer however they are usually the same length. A liability that comes due in more than a year is considered as non-current. One example of that would be bonds, for each year a person will have interest payments payable to the bondholders. The current interest expense due in the coming year is considered as a current liability until paid, while the remaining payments that occur more than one year in the future are considered

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