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Financial liability

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Financial liability

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by AvatarMikeLittle.
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  • February 4, 2017 at 9:54 am #371014
    AvatarAnuja Nair
    Member
    • Topics: 365
    • Replies: 353
    • ☆☆☆☆

    Question) A company issues 5% loan notes at their nominal value of $20 000 with an effective rate of 5%. The loan notes are repayable at par after 4 years.

    What amounts will be shown in the statement of profit or loss and statement of financial position for years 1-4 ?

    The figures in the answer key showed the following:

    Year 3 current liabilities $20000
    Year 4 current liabilities $0

    I understand why year 3 is classified as current liabilities, but i just want to know if it does matter, if we classify year 4 as current or non current liability since its only $0 .

    February 4, 2017 at 2:11 pm #371036
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    How can it be either a current or a non-current liability … it’s not any kind of liability! It’s $zero!!

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