A current liability in accounting is generally a debt that is expected to be paid off within a year. Long-term liabilities are those debts that mature in a period longer than one year. The term can also refer to a debt that cannot be paid with current assets. Both current debts and long-term debts are recorded on a company's balance sheet. When preparing a balance sheet, adhere to the basic standards set forth by generally accepted accounting principles to record your financial data.
Add up the long-term debt's principal payments due each month for the fiscal year.
Deduct the amount you calculated in Step 1 from the debt's total balance and then enter that amount in the current liabilities field of the balance sheet.
Enter the remaining long-term debt balance into the long-term liabilities field of the balance sheet.
If you have additional information such as note terms, interest rate or amounts of principal due within the next five years, enter those items in the Notes to Financial Statements portion of the balance sheet. Disclosure of note terms is required by GAAP. A company's risk exposure related to the long-term debt can be calculated using the formula: long-term debt / long-term debt + preferred stock + common stock value.
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