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When it comes to valuing it refers to estimating the worth of any items and when a company is estimating worth, then it certainly has to be the liabilities which is why it is termed as valuing liabilities. While talking about the company’s liabilities it refers to the amount of money that the company owes. Liabilities are actually the obligation of company that may happen during business transaction.
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Different types of liabilities
There are different types of liabilities:
- Long term liability
- Current liability
- Contingent liability
While managing the balance sheet, liabilities are reflected and it is known as the money that needs to be settled down as it acts as a debt. Sometimes it is also valued as the fair market value. Usually you would understand the amount of liabilities and it is also the amount that should be estimated.
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