Long Term Obligations and Assets
Lessons in
chapter IV
of
Financial Reporting in Government
By
Dr. John Sacco
,
George Mason University
Revised
Saturday, April 12, 1997
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Long term
generally means more than a year. It can refer to
obligations or assets.
Long term obligations
mean those that come due or need to be paid in a year or
later. Long term
fixed assets
mean those that will have economic value for more than a
year from now. In business, long term is defined by more
than a year or more than one operating cycle, whichever is
longer. For example, in a business, a manufacturing process
may take much longer than a year. In such a case, long term
could be greater than a year. The year period is used in
government because the budget is generally an annual
document. Thus, a year or less is current; more than a year
is long term. Some exceptions exist. Sometimes items
lapsing into the next sixty days after the end of year are
considered current.
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See Also: the
introduction
, a
pretest
, a
discussion
, the
study aides
, a
test
, and your
progress evaluation