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Question
State giving reason whether Trade Payables are classified as Current Liabilities or Non-current Liabilities in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:
| Case | Operating Cycle Period (Months) | Expected Payment Period (Months) |
| 1 | 10 | 11 |
| 2 | 10 | 12 |
| 3 | 10 | 13 |
| 4 | 14 | 13 |
| 5 | 15 | 16 |
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Solution
| Case | As Current Liabilities or Non-Current Liabilities |
Reason |
| 1 | Current Liabilities | Expected payment is more than the operating cycle but payable within 12 months. |
| 2 | Current Liabilities | Expected payment is more than the operating cycle but payable within 12 months. |
| 3 | Non-Current Liabilities | Expected payment is more than the operating cycle and payable after 12 months. |
| 4 | Current Liabilities | Expected payment is less than the operating cycle. |
| 5 | Non-Current Liabilities | Expected payment is more than the operating cycle and payable after 12 months. |
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