Current and non-current liabilities

As known, the liabilities are the financial obligations of an enterprise. Examples are trade accounts payable, loans, and accruals made at the year end before an invoice has been received. Liabilities are disclosed under the two heading: current and non-current. Other maybe used for non-current, such as ‘long-term’.

A current liability is a liability which is payable within 12 months of the balance sheet day. A non-current liability is any other liability. If a liability is due for payment after 12 months and one day, it’s a non-current liability.

The distinction is useful for users of the accounts to determine the ability to pay the liabilities becoming due for payment.

Related posts:

1. Distinction between current and non-current liabilities
2. Balance sheet accounts payable
3. Quick ratio vs current ratio
4. Current ratio analysis
5. Current and liquid ratios