Long Term Liabilities (Utang Jangka Panjang) - Oleh : Ades Marsela, M.Pd

Summary

This video explains the concept of long-term liabilities, focusing on bonds, mortgages, and other long-term debts. It discusses different types of long-term debt such as secured and unsecured bonds, as well as the characteristics and risks involved. Key points include how bonds are issued, their interest rates, and how their value is determined. The video also covers the accounting treatment for bond issuance, including premium and discount adjustments. Ultimately, it offers a comprehensive guide on managing long-term financial obligations and their impact on corporate finance.

Takeaways

• 😀 Long-term liabilities refer to debts that are not due within one year or one operating cycle, with examples including bonds, mortgages, and long-term notes payable.
• 😀 Bonds are a common form of long-term debt, where companies issue bonds to raise capital. These bonds are contracts that promise to pay back a principal sum with periodic interest payments.
• 😀 Key characteristics of bonds include face value (the principal to be repaid), coupon rate (the interest rate paid periodically), and maturity date (the date when the principal is repaid).
• 😀 Mortgage debt involves loans secured by real estate, where if the borrower defaults, the creditor can seize the collateral. Mortgages typically have a repayment period of 15 to 25 years.
• 😀 The main features of mortgages include being non-divisible, involving an additional agreement beyond the primary loan contract, and offering the lender priority in debt repayment.
• 😀 A long-term note payable is similar to a short-term note payable, except it has a longer repayment period, often over a year.
• 😀 Leases allow companies to use assets without ownership, making it easier to manage cash flow and plan finances. Lease liabilities are considered long-term debts.
• 😀 The advantages of long-term debt include a lower interest rate compared to short-term debt, but it comes with the disadvantage of higher risk due to longer repayment periods.
• 😀 A company's stock value can be affected by the level of long-term debt, as excessive borrowing can negatively impact equity holders.
• 😀 Bonds can be classified in various ways, including by maturity, security (secured vs unsecured), and whether they are convertible into shares, with different types offering varying levels of risk and return.

Q & A

What is meant by long-term liabilities in accounting?

Long-term liabilities refer to obligations or debts that a company needs to settle after more than one year or one operating cycle. They include various forms of debt such as bonds and mortgages, and they typically require the company to pay back the borrowed amount over an extended period, usually several years.

What is the difference between short-term liabilities and long-term liabilities?

Short-term liabilities are obligations that need to be paid within one year or within the operating cycle, while long-term liabilities are those that have a repayment period longer than one year or one operating cycle.

What is an obligation or bond in the context of long-term liabilities?

An obligation, or bond, is a debt instrument issued by a company to raise capital. It involves a contract where the issuer promises to pay the principal amount (face value) on a specific maturity date along with periodic interest (coupon) payments.

What are the key characteristics of a bond?

The key characteristics of a bond include the face value (the principal amount to be paid at maturity), the coupon rate (interest paid periodically), and the maturity date (when the principal is paid back). Additionally, bonds can be classified based on whether they are secured or unsecured.

How is the interest on bonds typically paid?

The interest on bonds, also known as the coupon, is typically paid periodically (e.g., quarterly, semi-annually, or annually) according to the terms of the bond agreement.

What is a mortgage debt, and how does it work?

A mortgage debt is a loan secured by real estate or property. If the borrower fails to repay the loan, the lender has the right to seize and sell the property to recover the debt. It usually has a long repayment period, ranging from 15 to 25 years.

What are the distinguishing features of mortgage debt?

Key features of mortgage debt include its long repayment period, the collateral (real estate) used as security, and the fact that it is non-divisible, meaning the entire debt is tied to the property until fully paid.

What are the risks associated with long-term debt?

Long-term debt carries the risk of prolonged repayment periods, which can increase the financial strain on a company. Additionally, fluctuations in interest rates and the company's financial performance can affect the ability to meet debt obligations, potentially impacting the company's stock value.

How do bonds differ in terms of their maturity and guarantee types?

Bonds can differ based on their maturity and the type of guarantee they have. For example, bonds may have a fixed maturity (e.g., one-time repayment) or serial maturities (periodic repayments). Additionally, they can be secured (backed by assets) or unsecured (higher risk with no asset backing).

What is the process of bond issuance and sale?

When a company issues a bond, it sets the terms such as the interest rate, maturity date, and face value. The bond is then sold to investors. The price of the bond may vary depending on the interest rate and the company's creditworthiness. Bonds may also be sold at a premium or discount, depending on market conditions.