ICAEW AF · Chapter 13 · Question 12 of 12
Under IAS 1 Presentation of Financial Statements, which of the following would be classified as a non-current liability in a company's statement of financial position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Loan notes that are repayable in five years' time
Explanation
IAS 1 classifies a liability as current if it is due to be settled within twelve months after the reporting period, is held for trading, or is expected to be settled in the normal operating cycle; all other liabilities are non-current. Loan notes repayable in five years are not due within twelve months, so they are non-current. Income tax payable, trade payables and an overdraft repayable on demand are all due within twelve months and are current liabilities.
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