ICAEW AF · Chapter 13 · Question 7 of 12
At its year end, a company has a bank loan of £50,000, repayable in equal annual instalments of £10,000, with the first instalment due nine months after the year end. How should the loan be presented in the statement of financial position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Current liabilities £10,000; non-current liabilities £40,000
Explanation
Under IAS 1, a liability is current if it is due to be settled within twelve months after the reporting period. The instalment of £10,000 due in nine months is current. The remaining £50,000 - £10,000 = £40,000 is due after more than twelve months and is non-current.
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