Non-current liability
A non-current liability is a liability that does not meet the criteria for classification as current. The assessment includes whether the entity has a right at the reporting date to defer settlement for at least twelve months, as well as other classification requirements. It commonly includes the longer-term part of borrowings. Classification describes when settlement can be required; it does not make the obligation less real.
Worked example
A $100,000 loan has $20,000 repayable within the next twelve months and $80,000 later. Assuming the entity has the necessary right to defer the later payments, show $20,000 as current and $80,000 as non-current.
Common mistake
Do not classify the entire loan as non-current just because its original term was five years.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: long-term liability, non-current liabilities