Rishabh Goyal (.) (41 Points)
10 April 2012
Dear All,
Please advice if an Installment of Loan is payable within 12 months (or operating cycle), weather it would be regarded as Current Liability ? (Provided rest of the Installments of loan are payable after 12 months (or operating cycle)
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 10 April 2012
It would be classified as an Loan only. The tenure of loan is normally minimum of 3 years, so it cannot be classifed as an current liability.
Could you please put your question in more detail. What are you trying to ask from an installment & rest of the installments.
Rishabh Goyal
(.)
(41 Points)
Replied 10 April 2012
That means if a loan of Rs 10 crore is payable in 5 instalments,, of Rs. 2 crore each starting after 1st year and and if on balance sheet date 1st instalment is due after 6 months from balance sheet date (i.e. if balance sheet date is 31-03-12 and 1st instalment is due on 30-6-12 ) then would it be shown as current liabilty or NCL ?
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 10 April 2012
It will be a NCL, as the due date of the installment would not alter the nature of the loan i.e. it would not become a CL isntead of an NCL.
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