Dear All,
Please advice if an Installment of Loan is payable within 12 months (or operating cycle), weather it would be regarded as Current Liability ? (Provided rest of the Installments of loan are payable after 12 months (or operating cycle)
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Query regards schedule vi
Replies (3)
It would be classified as an Loan only. The tenure of loan is normally minimum of 3 years, so it cannot be classifed as an current liability.
Could you please put your question in more detail. What are you trying to ask from an installment & rest of the installments.
That means if a loan of Rs 10 crore is payable in 5 instalments,, of Rs. 2 crore each starting after 1st year and and if on balance sheet date 1st instalment is due after 6 months from balance sheet date (i.e. if balance sheet date is 31-03-12 and 1st instalment is due on 30-6-12 ) then would it be shown as current liabilty or NCL ?
It will be a NCL, as the due date of the installment would not alter the nature of the loan i.e. it would not become a CL isntead of an NCL.
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