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ACCA Applied Knowledge · Business and Technology · Financial information provided by business

Which of the following would be classified as a current liability in a company's statement of financial position at 31 December?

A trade payable due in 45 days is a current liability because it will be settled within twelve months of the reporting date. A five-year loan and long-term deferred tax are non-current, and share capital is part of equity rather than a liability.

  1. AA bank loan repayable in full in five years
  2. BA trade payable due for payment in 45 daysCorrect
  3. CShare capital issued by the company
  4. DA deferred tax balance expected to reverse in ten years

Explanation

Current liabilities are those expected to be settled within the normal operating cycle or within twelve months of the reporting date. A trade payable due in 45 days meets this. The loan is non-current, share capital is equity, and the deferred tax is long term.

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