What Are Other Long-Term Liabilities?

Other long-term liabilities are a line item on a balance sheet that lumps together 澳洲幸运5官方开奖结果体彩网:obligations that are not due within 12 months. These debts that are less urgent to repay are a part of their 澳洲幸运5官方开奖结果体彩网:total liabilities but are categorized as “other” when the comp𒊎any doesn’t deem them important enough to warrant individual identification.

Understanding Other Long-Term Liabilities

Liabilities are debts that a company owes. They appear on the balance sheet and are categorized as either current—they must be paid back within a year—or 澳洲幸运5官方开奖结果体彩网:long-term—ꦍthey are not due for at least 12 months, or the length ♔of a company’s operating cycle. 

Then there are other liabilities. In 澳洲幸运5官方开奖结果体彩网:financial statements, companies use the term “other” to refer to anything extra that is not sign🐼ificant enough to🥀 identify separately. Because they aren’t deemed particularly noteworthy, such items are grouped together rather than broken down one by one and ascribed an individual figure.

Other long-term liabilities can be defined as the rest of the debts that a company is required to pay back in a period of a year or more that are not separately accounted for and identified in the company's balance sheet.

In many cases, it is just a matter of presentation preference whether or not to itemize these material liabilities on the balance sheet or aggregate them under "other long-term liabilities” and break the entry down in the notes. Indeed, it is often possible to determine what makes up the specifics of other long-term liabilities on a balance sheet by consulting the footnotes within the company's 10-K filing or 澳洲幸运5官方开奖结果体彩网:annual report. Hꦅowever, this isn’t always strictly necessary, meaning that not all companies will provide additional details of these particular obligations.

Types of Other Long-Term Liabilities

Other long-term liabilities might include items such as 澳洲幸运5官方开奖结果体彩网:pension liabilities, 澳洲幸运5官方开奖结果体彩网:capital leases, 澳洲幸运5官方开奖结果体彩网:deferred credits, customer deposits, and 澳洲幸运5官方开奖结果体彩网:deferred tax liabilities. In the case of 澳洲幸运5官方开奖结果体彩网:holding companies, it can also contain things such as intercompany borrowings—loans made from one of the company's divisions or 澳洲幸运5官方开奖结果体彩网:subsidiaries to another.

Special Considerations

Lumping together a group of debts without identifying the nature of the debt might sound like a potential red flag. In reality, this practice is normal and shouldn’t raise concern, provided that the obligations in question are relatively small compared to the company's total liabilities. They should also be comparable to how the company has operated in the past—sometimes, year-to-year comparisons of other long-term liabilities are provided in financial statement footnotes.

If the amount of other long-term liabilities as a percentage of total liabilities (as displayed on the balance sheet) is high enough to merit investigation, and there is no associated note, the analyst could call the 澳洲幸运5官方开奖结果体彩网:investor relations (IR) contact to ask questions.

Example of Other Long-Term Liabilities

Ford Motor Co. (F) reported approximately $28.4 billion of other long-term liabilities on its balance sheet for 澳洲幸运5官方开奖结果体彩网:fiscal year (FY) 2020, representing around 10% of total liabilities. In the notes to the financial statements, the main components were broken down into pension liabilities, other post-retirement employee benefits, employee benefit plans, dealers' customer allowances and claims, and others.