IAS1 : PRESENTATION OF FINANCIAL STATEMENTS
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Statement of financial position >
An entity shall classify a liability as current [one] when:
(a) it expects to settle the liability in its [two] normal operating cycle;
(b) it holds the liability [three] primarily for the purpose of trading;
(c) the liability is due [four] to be settled within twelve months after [five] the reporting period; or
(d) the entity does not [six] have an unconditional right to defer settlement of the liability [seven] for at least twelve months after the reporting period.
An [eight] entity shall classify all other liabilities [nine] as non-current.
Some current liabilities, such as trade payables [ten] and some accruals for employee and other operating costs, [one] are part of the working capital used in the entity’s [two] normal operating cycle. An entity classifies such [three] operating items as current liabilities even if they [four] are due to be settled more than [five] twelve months after the reporting period. The same [six] normal operating cycle applies to the classification of an entity’s [seven] assets and liabilities. When the entity’s normal operating [eight] cycle is not clearly identifiable, it [nine] is assumed to be twelve months.
Other current [ten] liabilities are not settled as part of the normal [one] operating cycle, but are due for settlement within [two] twelve months after the reporting period or held [three] primarily for the purpose of trading. Examples are financial [four] liabilities classified as held for trading in accordance with [five] IAS 39, bank overdrafts, and the current portion [six] of non-current financial liabilities, dividends payable, income [seven] taxes and other non-trade payables. Financial liabilities [eight] that provide financing on a long-term basis (ie [nine] are not part of the working capital used [ten] in the entity’s normal operating cycle) and are not [one] due for settlement within twelve months after [two] the reporting period are non-current liabilities, subject [three] to paragraphs 74 and 75.
An entity classifies its [four] financial liabilities as current when they are [five] due to be settled within twelve months [six] after the reporting period, even if:
(a) the original [seven] term was for a period longer than twelve [eight] months, and
(b) an agreement to refinance, or to reschedule payments, [nine] on a long-term basis is completed after the reporting [ten] period and before the financial statements are authorised [one] for issue.
If an entity expects, and has the discretion, to refinance [two] or roll over an obligation for at least twelve months after [three] the reporting period under an existing loan facility, [four] it classifies the obligation as non-current, even if it [five] would otherwise be due within a shorter [six] period. However, when refinancing or rolling over the obligation [seven] is not at the discretion of the entity (for example, [eight] there is no arrangement for refinancing), the entity [nine] does not consider the potential to refinance the obligation [ten] and classifies the obligation as current.
When an entity breaches a provision [one] of a long-term loan arrangement on or before the end of the reporting [two] period with the effect that the liability becomes [three] payable on demand, it classifies the liability as current, [four] even if the lender agreed, after the reporting period [five] and before the authorisation of the financial statements for issue, not [six] to demand payment as a consequence of the breach. An entity classifies [seven] the liability as current because, at the end of the reporting period, [eight] it does not have an unconditional right [nine] to defer its settlement for at least twelve months [ten] after that date.
However, an entity classifies the liability [one] as non-current if the lender agreed by the end of the reporting period [two] to provide a period of grace ending at least twelve [three] months after the reporting period, within which [four] the entity can rectify the breach and during which [five] the lender cannot demand immediate repayment.
In respect [six] of loans classified as current liabilities, if the following events [seven] occur between the end of the reporting period and the date [eight] the financial statements are authorised for issue, those [nine] events are disclosed as non-adjusting events in accordance [ten] with IAS 10 Events after the Reporting [one] Period:
(a) refinancing on a long-term basis;
(b) rectification of a breach [two] of a long-term loan arrangement; and
(c) the granting by the lender [three] of a period of grace to rectify a breach of a long-term loan [four] arrangement ending at least twelve months after [five] the reporting period.
Thus it appears, in what various ways Nature has taught man her first great lesson of love and union.
Nor did she give the same talents either in kind or in degree to all, evidently meaning that the inequality of her gifts should be ultimately equalized by a reciprocal interchange of good offices and mutual assistance.
Thus, in different countries, she has caused different commodities to be produced, that expediency itself might introduce commercial intercourse.
The Complaint of Peace