ACCA FA · Chapter 11 · Question 2 of 12
At the year end, a company has a bank loan of $120,000 which is repayable in equal annual instalments of $20,000, the next of which is due in eight months. How should the loan be presented in the statement of financial position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Current liabilities $20,000; non-current liabilities $100,000
Explanation
IAS 1 classifies a liability as current if it is due to be settled within twelve months of the reporting date. Only the next instalment of $20,000 falls due within twelve months, so it is current, and the remaining $100,000 is non-current.
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