Other non-current liabilities

Generally speaking, non-current liabilities are obligations from non-current occurrences, often due more than 12 months after the reporting date. Non-current liabilities are a major part of the liabilities side of a companys balance sheet. In addition to non-current liabilities, current liabilities are also presented on the balance sheet. Typically current liabilities need to be paid within 12 months from the reporting date.

A companys non-current liabilities may include bonds, mortgages, capital leases, term loans, pension and other post-employment benefit obligations, deferred tax liabilities, and certain other long-term obligations.

Bonds

A bond is a debt instrument issued by a company to a lender. Bonds provide a fixed income payment over the borrowers life and are usually denominated in denomination of the currency it is issued in. Bonds often come with an expiration date and require the company to repay the loan at the end of the term.

Mortgages

Mortgages are a type of loan used by individuals or companies to purchase real estate. The loan is secured by the property purchased and the lender can repossess the property if the loan is not paid on time.

Capital Leases

A capital lease is a type of lease that is considered a financing transaction for accounting and tax purposes. These types of leases are usually of a long-term nature (more than 12 months) and can include any type of asset that a company leases in order to acquire the use of it.

Term Loans

Term loans are a form of debt financing where a lender agrees to lend money to a borrower for a specified period of time. The payments for the principal and interest are due periodically and the term loan may include other conditions such as required assets as collateral.

Pension and Other Post-Employment Benefit Obligations

Pension and other post-employment benefit obligations are promised benefits that an employer has promised to provide to its employees in the future. These obligations may include future pension payments, health care, or other post-employment benefits.

Deferred Tax Liabilities

Deferred tax liabilities are liabilities that are incurred when a company overpays taxes or has taxes that are due in future years. This liability is recognized in the financial statements due to the differences between book and taxable income.

Other Long-Term Obligations

Other long-term obligations may include any type of liability that has a repayment period of more than 12 months. This could include long-term debt or any other type of financial liability that is not a current liability.

Non-current liabilities are an important part of a companys balance sheet and are often required in order to finance certain activities within a company. It is important that companies are able to accurately track and record all of their non-current liabilities in order to ensure that they have sufficient funds to meet their future obligations. Non-current liabilities can also be used to finance investments, acquisitions, and other long-term business activities.

Non-current liabilities are also called long-term liabilities. Generally, they are liabilities that are due to repayment within a period of more than one year to the creditor. It refers to liabilities which not expected to be settled within 12 months of the balance sheet date.

Non-current liabilities can be further divided into three categories: financial liabilities, provisions and other liabilities. Financial liabilities are the companys debts such as bank loans, bonds and leasing obligations. Provisions refer to such liabilities as deferred tax liability and gratuity provided to employees. Other liabilities may include trade payables, rent payments, employee benefit obligations and deferred income.

Non-current liabilities can affect a company’s financial health in two ways. First, it increases the total liabilities of the company, which reduces the net asset value of the company and affects financing capacity when liabilities are too high. Second, non-current liabilities can bring a large amount of fixed cost burden to the company, thus affecting the company’s operating income.

Therefore, the management should reasonably control non-current liabilities, actively reduce long-term debt, avoid increasing the risk of high leverage ratio and reduce the cost burden of long-term liabilities. In addition, non-current liabilities should be managed in a dynamic, timely and effective manner to ensure that the interest rate is relatively low, the term of repayment is as long as possible, and the degree of risk control is stabilized.