long term liabilities

Long Term Liabilities

Long-term debt is payable to a third party company to be repaid in more than one year. There is a clear enough distinction with short-term debt on the redemption or maturity. Short-Term Debt with maturities of less than one year, where as long-term debt with maturities of more than one year.

In contrast to short-term debt in the form of costs still to be paid or payable is generally not done in writing, in the long-term debt is usually the binding between the debtor and the creditor in writing. Binding of in writing shall be incorporated in the parent document is called a credit agreement. These credit agreements contain a given amount of debt, interest rates, repayment terms and interest, goods used as collateral, and others.

v  Examples of long-term debt and understanding:

1.      Bonds Payable

Debt Bonds are debt / long-term debt in writing within the contract bonds made ​​by the debt required to pay its debts with interest rates (bond issuer) and the party receiving the payment or its receivables and interest (the bondholders) is generally without pledging of an asset. When first sold bonds sold at par value

In addition to Bond Debt incurred relating to the expenditure of funds obtained through bonds. Purchasers of bonds referred to the bondholders. The nominal value of bonds listed bonds, annual interest, bond redemption date and other provisions of the appropriate type of bonds.

-          Gains bonds:

a.       Bondholders don’t have voting rights in that company policy does not affect management.

b.      Interest on the bonds may be lower than the dividend to be paid to
shareholders.

c.       Interest is the fee charged to companies that can reduce tax liability while the dividend is a distribution of earnings that can’t be deducted as expenses.

-          Conversely there are also less favorable terms include:

a.        Burden of interest on the bonds is fixed either in a state enterprise profit or loss

b.      If companies can’t afford to pay the bond at maturity, bondholders still have the right to demand repayment of the bonds while shareholders do not have such rights as shareholders are the owners of companies that take responsibility for the company to bear the risk of loss.

2.      Long-Term Notes Payable

Debt is debt in the form of draft formal written evidence, the ability to pay for content written by a certain date. The person or company that has bills usually prefer this type because there is strong evidence to charge, especially when it came to the court. This debt is tantamount to debt note that usually distinguishes only time at which this debt in less than one year.

3.      mortgage debt

loans to be secured by immovable property. In the borrower's loan agreements mentioned property used as collateral for example in the form of land on the building. If the borrower does not repay the loan on time, then the lender can sell the collateral to offset against the loan in question.

In addition to Mortgage Loans relating to the acquisition of funds arising from loans secured by fixed assets. In the mentioned property penjanjian borrower used as collateral in the form of land or buildings. If the borrower does not repay on time, the lender can sell the collateral which is then offset against the debt.

4.      Advances from Affiliated Companies

Payable to all shareholders generally makes loans derived from the consists of the outside shareholders' capital contributions. Payable to affiliates can be derived from loan or other transaction-transakti, eg purchase of goods and services.

5.      Long-Term Credit Bank Debt

Long-term debt typically arises because of the need to buy the assets, raise capital firms, investment, or perhaps to pay off debt.