Debt Maturity Definition
Organizations often engage in borrowing activities to seek operating cash in the short term and long term. A company must properly monitor liquidity levels to pay for loan amounts at maturity.
A debt is also referred to as a liability and is a loan that an organization must repay. Examples include taxes due, accounts payable and bonds payable.
Debt maturity is the date on which a liability becomes due for payment. Debt maturity is otherwise known as debt maturity date.
A bond is a long-term debt product that a company issues on financial markets. Bond maturities vary but they usually range from three to 20 years. A company refunds the principal amount to bondholders at maturity.
In an installment loan arrangement, a borrower pays equal amounts to a lender during the loan term. These payments include interest and principal amounts; as such, no principal amount is due at the loan maturity.
An accountant reports debt products in a company's balance sheet, depending on the maturity. He lists as short-term liabilities the debts maturing within 12 months and as long-term liabilities those maturing after a year.