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ACCA Applied Knowledge · Financial Accounting · Statement of financial position

Kiln Co has a 31 December year end. It has a $120,000 loan repayable by equal annual instalments of $30,000 on each 1 January, the first being 1 January next year. The loan is the only borrowing. In the statement of financial position at 31 December, what are the current and non-current portions of the loan?

Current $30,000 and non-current $90,000. Only the instalment due on 1 January next year falls within twelve months of the reporting date. The three later instalments of $30,000 each are due after more than twelve months and so are non-current.

  1. ACurrent $30,000; non-current $90,000Correct
  2. BCurrent $120,000; non-current nil
  3. CCurrent nil; non-current $120,000
  4. DCurrent $60,000; non-current $60,000

Explanation

The instalment due on 1 January, the day after the reporting date, is due within twelve months, so $30,000 is current. The remaining three instalments of $30,000 fall due later than twelve months, giving $90,000 non-current. Showing all as current ignores the repayment schedule.

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