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CMA Intermediate · Corporate Accounting and Auditing · Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

A company has term loan instalments of Rs 40 lakh due for repayment within 12 months of the reporting date and Rs 90 lakh due thereafter. How should these be presented in the Balance Sheet?

Rs 90 lakh is shown as non-current borrowings and Rs 40 lakh, being due within twelve months, is shown as current maturities of long-term debt under other current financial liabilities. The split follows the classification of liabilities by their settlement date relative to the reporting date.

  1. ARs 130 lakh under non-current borrowings
  2. BRs 90 lakh under non-current borrowings and Rs 40 lakh under current maturities of long-term debt in other current financial liabilitiesCorrect
  3. CRs 40 lakh under non-current borrowings and Rs 90 lakh under current liabilities
  4. DRs 130 lakh under current borrowings

Explanation

The portion repayable within 12 months is current maturities of long-term debt, shown under current financial liabilities. The remaining Rs 90 lakh stays as non-current borrowings. Showing all Rs 130 lakh as non-current ignores the current portion.

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