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Long term borrowing

Reshma Golani (student) (190 Points)

09 June 2014

How to bifercate the amt of borrowing in current & non current portion as per revised schedule VI

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Nikhil Raj (Self) (91 Points)
Replied 09 June 2014

Dear Collegue,

The loans which are repayable in a period more than twelve months or the operating cycle in
case of loans taken specifically for the purposes of business are classified as long-term
borrowing and shown on face of balance sheet.
The current maturities of long-term borrowings i.e. amount repayable within 12 months /
operating cycle in respect of loans taken for purposes of business, would be shown as
current maturities to long term debt under ‘other current liabilities” and amount to be given in
the Notes to accounts.
The loans which are repayable on demand or whose original tenure not more than 12 months
/ operating cycle in respect of loans taken for purposes of business, would be shown as
short-term borrowings on the face of balance sheet.

For Practical Puropse:

A Loan has o/s balance as o n 31.03.2014 = Rs.1,00,000.00

From 01-4-2014 to 31-03-2015 we have to pay Rs.50,000.00

Next Year we have to pay balance amount Rs.50000 as per the Loan agreement and repayment schedule.

As per schedule VI Requirement

Current Maturities -50000 ( Ist Payment)

Non Current Maturities-50000 (2nd Payment)

Regards

Nikhil