Legal obligations of the business, which appear on its Balance Sheet.

Liabilities are debt carried by the business and include such items as

• Accounts payable
• Loans
• Deferred revenues
• Accrued expenses

Those liabilities that must be paid within one year are referred to as current liabilities, the rest are called long-term liabilities. When valuing a small business for sale, you may need to recast its financials, including the liabilities.