20 June 2010
Should we have to disclose liability of term loan repayable within one year as Current Liability? With regards, Rajesh
Sorry Experts, I shall put my question more clearly. The Term loan is repayable in 10 years amounting Rs 250 lakhs.
In year 1 the principal repayment amounts 25 lakhs
Now whether we have to show in the balance sheet Rs.25 lakhs in current liabilities and the balance Rs.225 lalkhs as term loans. Else we have to show Rs. 250 lakhs as term loan in the balance sheet
Thank u sir Mr. Rasesh and the other expert. With regards, Rajesh
20 June 2010
The whole of the Rs.250 L should be shown as Term Loan. It is not correct to show the instalment which has become payable as current liability & the balance as Term Loan.
03 January 2011
Current liabilities are those which fall due for payment in the 12 months following the balance sheet date. They are those that come due for payment in the normal operating cycle. The cutoff is taken as 1 year.
In the above case there will be 2 components the 25 lacs falling due in 1 year is a current liabiliity the other portion can be acrried forward as non current.
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