what are total liabilities 
total liabilities are the combined debts and obligations that an individual or company owes to outside parties everything the company owns is classified as an asset and all amounts the company owes for future obligations are recorded as liabilities on the balance sheet total assets minus total liabilities equals equity investopedia tara anandunderstanding total liabilitiesliabilities can be described as an obligation between one party and another that has not yet been completed or paid for they are settled over time through the transfer of economic benefits including money goods or services liabilities consist of many items ranging from monthly lease payments to utility bills bonds issued to investors and corporate credit card debt money received by an individual or company for a service or product that has yet to be provided or delivered otherwise known as unearned revenue is also recorded as a liability because the revenue has still not been earned and represents products or services owed to a customer future pay outs on things such as pending lawsuits and product warranties must be listed as liabilities too if the contingency is likely and the amount can be reasonably estimated these are referred to as contingent liabilities types of liabilitieson the balance sheet a company s total liabilities are generally split up into three categories short term long term and other liabilities total liabilities are calculated by summing all short term and long term liabilities along with any off balance sheet liabilities that corporations may incur balance sheets that show a percentage as well as a numerical value are known as common size balance sheets short term or current liabilities are liabilities that are due within one year or less they can include payroll expenses rent and accounts payable ap money owed by a company to its customers because payment is due within a year investors and analysts are keen to ascertain that a company has enough cash on its books to cover its short term liabilities long term liabilities or noncurrent liabilities are debts and other non debt financial obligations with a maturity beyond one year they can include debentures loans deferred tax liabilities and pension obligations less liquidity is required to pay for long term liabilities as these obligations are due over a longer timeframe investors and analysts generally expect them to be settled with assets derived from future earnings or financing transactions one year is generally enough time to turn inventory into cash 