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Trade payables

Raghib Sayyed (1 Points)

05 May 2025

When Trade payable is current liabilities than why Trade payable ageing schedule (disclosure table) is for more than 1 year and for 3 year.

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7569 Points)
Replied 05 May 2025

The trade payable ageing schedule is a disclosure requirement that provides information on the outstanding trade payables and their age.

Although trade payables are typically classified as current liabilities, which are expected to be settled within one year, the ageing schedule can show payables outstanding for more than one year. Reasons for Ageing Schedule Beyond One Year -

*Operational Practices*: Companies may have operational practices or contractual terms that result in payables being outstanding for more than one year.

- *Dispute or Litigation*: Payables may be disputed or under litigation, leading to delays in payment. -

*Industry Norms*: Certain industries may have longer payment terms or norms that result in payables being outstanding for more than one year.

Purpose of Ageing Schedule The ageing schedule provides stakeholders with information on the company's liquidity position, creditworthiness, and ability to manage its working capital.

It helps to identify potential issues with payables management and assess the company's financial health.

Three-Year Ageing Schedule The three-year ageing schedule provides a more detailed breakdown of the company's trade payables and helps to identify trends or issues in payables management.

It can also provide insights into the company's ability to manage its working capital and meet its short-term obligations

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