13 December 2011
If any installment of long term loan is repayable within 12 months from the B/S date, whether amt of that instalment is to be classified as current and the balance loan is to be classified as non- current or the whole loan amt. is to be classified as non current?
The amount of the loan that is payable within 12 months is to be classifed under "Other Current Liabilities" and the non-current portion is to be classified under "Long Term Borrowing -- Term Loan".
The above view is also in line as stated in the para 8.3.1.9 of the Exposure Draft -- Draft Guidance Note to the Revised Schedule VI to the Companies Act, 1981, issued by ICAI.
The para states "The current maturities of all long-term borrowings will be disclosed under ‘Other Current Liabilities’ and not under long-term borrowings and short-term borrowings. Hence, it is possible that the same bonds / debentures / term loans may be bifurcated under both long-term borrowings as well as under other current liabilities....."
The above mentioned exposure draft can be downloaded from the below link 220.227.161.86/24323announ14223.pdf
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