# Reporting Long-Term Liabilities

Long-term liabilities, such as bonds and notes, are expected to come due in one year or longer. Notes payable are broken down and reported as both current and long-term. As liabilities come due, they may shift from one classification to another.
Liabilities on the balance sheet are broken down based on the length of time they are due. Liabilities coming due in less than a year are listed as current liabilities. Those due in longer than a year are listed as long-term liabilities. Because bonds and notes are normally due longer than a year into the future, they are reported as long-term liabilities. Bonds payable are reported at their carrying amounts. For a bond issued at a premium, the bond will be carried on the balance sheet at the face amount plus any unamortized premium. This could be shown as a net amount, or by listing both amounts, arriving at the carrying amount of the bond. Alternatively, the bonds might be simply listed as "Bonds Payable, carrying amount" or "Bonds Payable, including unamortized premium of $440,000." Presentation for a bond with a discount would look quite similar, but it would reduce the carrying amount of the bonds payable rather than increase it. As bonds come due, they may be shifted to current liabilities. The financial statement notes for long-term liabilities are primarily concerned with showing the types of long-term debts the company holds, their due dates (particularly as they approach), and the general terms of the arrangements. A typical notes section might appear as follows: Notes Related to Long-Term Liabilities On January 1, 2018, a bank note with Sunshine Bank was signed for the purchase of a fleet of 20 delivery vehicles. The face value of the note was$1,000,000, amortized over 10 years at a 6% interest rate. The following details note the balances and their nature.

Sunshine Bank Note
Current Balance $942,450 Current Portion -0- Net Long-Term Balance$942,450

Some financial statement notes detail the composition of the long-term debt by time period and due date.
Notes Payable by Due Date and Remaining Balance
Due in the Next Year $20,000 Due in Years 3–5$185,000
Due in Years 6–10 $280,000 Due in More than 10 Years$400,000
Total Notes Payable (LT) \$885,000