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If accounts payable is considered a current liability, then why are those payments due to supplier for more than a year (lets say 2 years) is still classified as a current liability in companies financial statements? Ideally, it should come under non-current liabilities right? Because its due for more than a year, not paid yet. Another doubt is, whether if a company does not plan on paying certain suppliers for indefinite period of time, will this accounts payable always be carried in the financial statements indefinitely also? No option to write off or something like that? I know its a liability and cannot be written off like how we do it for receivables, but is there any other alternative? Thanks in advance
“then why are those payments due to supplier for more than a year (lets say 2 years) is still classified as a current liability in companies financial statements?”
They aren’t – if they’re payable more than 12 months hence, they’re classed as long-term liabilities
“whether if a company does not plan on paying certain suppliers for indefinite period of time,”
That company is not likely to last long in business! To be frank with you, it’s a bit of a daft question!
Sorry 🙁
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