New schedule vi

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PRIYANKA (Querist)
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13 December 2011 If any installment of long term loan is repayable within 12 months from the B/S date, whether amt of that instalment is to be classified as current and the balance loan is to be classified as non- current or the whole loan amt. is to be classified as non current?

murtuza munim

murtuza munim (Expert)
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14 December 2011 Dear Priyanka,

The amount of the loan that is payable within 12 months is to be classifed under "Other Current Liabilities" and the non-current portion is to be classified under "Long Term Borrowing -- Term Loan".

The above view is also in line as stated in the para 8.3.1.9 of the Exposure Draft -- Draft Guidance Note to the Revised Schedule VI to the Companies Act, 1981, issued by ICAI.

The para states "The current maturities of all long-term borrowings will be disclosed
under ‘Other Current Liabilities’ and not under long-term borrowings and short-term borrowings. Hence, it is possible that the same bonds / debentures / term loans may be bifurcated under both long-term borrowings as well as under other current liabilities....."

The above mentioned exposure draft can be downloaded from the below link
220.227.161.86/24323announ14223.pdf

Hope the above helps you in your query.

Regards,
Murtuza

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