student
113 Points
Joined November 2008
First you should know difference btwn short term loan and current liability.
short term loan is taken to finance the sort term need ie. working capital requirment (Here i am assuming that you know the meaning of working capital being a C.A. student)
current liability is itself a part of working capital which arises in normal course of business we need not to take cash as in the case of short term loans.
now if you are clear with these both the term then whether any liability is long term or short term will depends apon period in which it is payeble.
if period of liability > 1 year it will be long term
if period of liability < 1 year it will be short term
and current liability never can be for moare than 1 year.
some authers also take midium term in considration (1year < X > 5year)