What characterizes non-current liabilities?

Non-current liabilities are characterized by being debts or obligations that a business has incurred, which are not expected to be settled within the next 12 months. This includes long-term loans, bonds payable, and deferred tax liabilities, among others. Such liabilities are crucial for understanding a company's long-term financial health and obligations, as they reflect commitments that extend beyond the immediate operational cycle of the business.

In contrast, obligations owed that will be paid in less than a year indicate current liabilities, which are distinctly different categories in accounting. Returns expected on investments refer to potential income rather than liabilities, and cash reserves represent the liquid assets a company has on hand, which do not fall into the liability category. Therefore, the identifying feature of non-current liabilities is their long-term nature, making the choice regarding debts that need to be paid back in more than one year the most accurate description.