Business Valuation Glossary
Legal obligations of the business, which appear on its Balance Sheet.
What It Means
Liabilities are debt carried by the business and include such items as
- Accounts payable
- 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.