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Statement as per schedule iii?????
A Ltd has taken a 3 yr loan specifically for a business whose operating cycle is 4 yrs. Hence had classified the same as current liabilities.
State correct or not with reasons
Replies (2)
yes it is correct
Yes,it is correct.
As per schedule III of companies act 2013,
A liability shall be classified as current when it satisfies any of the following criteria:—
(a) it is expected to be settled in the company’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within twelve months after the reporting date; or
(d) the company does not have an unconditional right to defer settlement of the
liability for at least twelve months after the reporting date. Terms of a liability that
could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
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