Long-term obligations are defined as those that will mature for more than 12 months from the reporting period.

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Think of the balance sheet as separating what must be paid soon from what will be paid later. Long-term obligations are those that will mature beyond the next 12 months from the reporting date, so they are classified as non-current liabilities. This is exactly why the statement is true: liabilities due after more than a year are shown as long-term, while those due within a year are current liabilities. In practice, there are a few nuanced situations—such as when a company renegotiates debt and has clear evidence of the ability and intent to refinance to a period beyond 12 months—where classification can shift before the statements are issued, but the basic definition remains that maturities beyond 12 months define long-term obligations.