Ritesh Jain (CA, CS in Job) (675 Points)
01 January 2009CAn ny body tell me ,on basis of repayment schedule...
How to classify
1. SHORT TERM LOAN.
2. LONG TERM LOAN.
3. CURRENT LIABILITY.
???????
IS IT
<3 YRS
>3 YRS
<1 YRS
RESPECTIVILY..........
PLEASE CONFIM...
Shiv om Jindal
(ACA)
(263 Points)
Replied 01 January 2009
If i am not mistaken:-
Short Term Loan <5 Years
Long Term Loans > 5 Years
Current Liability< 1 Year
madhur gupta
(student/article )
(1022 Points)
Replied 01 January 2009
i think period for short term n long term is 3 years not 5 years
gourav
(student)
(113 Points)
Replied 01 January 2009
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)
CAclubindia
