HOW TO SPLIT BETWEEN CURRENT AND NON CURRENT FOR A LOAN THAT IS PARTIALLY DISBURSED?

The loan has not proceed repayment. The loan is not entirely disbursed nonetheless since the office building related to the loan is not completed. How to separate in between stream and non current?

{ 1 comment }

Sandy January 22, 2014 at 2:07 pm

It depends on the terms of the bank loan and the repayment schedule. If repayment is not due until after the building is completed, when is that expected? What is the year-end for which you are preparing accounts? If it’s unlikely that repayment will start until after 12 months from your year-end, you should classify the whole amount disbursed to date under non-current liabilities, and provide full details in the notes to the financial statements.

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