{"id":4713,"date":"2014-01-13T08:25:09","date_gmt":"2014-01-13T06:25:09","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=4713"},"modified":"2014-01-12T08:27:50","modified_gmt":"2014-01-12T06:27:50","slug":"distinction-of-current-and-non-current-on-statement-of-financial-position","status":"publish","type":"post","link":"http:\/\/www.officetodo.com\/public\/distinction-of-current-and-non-current-on-statement-of-financial-position\/","title":{"rendered":"Distinction of current and non-current on statement of financial position"},"content":{"rendered":"

First lets agree that the \u201cstatement of financial position\u201d you may have heard or read about is something we also like to call \u201cbalance sheet\u201d from time to time. Regardless of how you name it though, it still includes your company\u2019s assets, liabilities and equity balances. Name does not change the contents.\u00a0<\/span><\/p>\n

Now, when it comes to contents, the financial reporting frameworks declare the items to be shown within these groups, i.e. receivables, inventories, payables, provisions etc., however they are more flexible when it comes to distinction of current and non-current presentation amongst assets and liabilities.<\/span><\/p>\n

There could be two options for presenting your assets and liabilities:<\/span><\/p>\n

1.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Classifying current and non-current assets and liabilities\u00a0separately<\/b>.<\/span><\/span><\/p>\n

a.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Current asset is something you:<\/span><\/span><\/p>\n

i.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0hold primarily for trading purposes;<\/span><\/span><\/p>\n

ii.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0expect to realise during your company\u2019s normal operating cycle;<\/span><\/span><\/p>\n

iii.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0expect to realise within the next 12 months after the reporting period.<\/span><\/span><\/p>\n

b.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Current liability is something you:<\/span><\/span><\/p>\n

i.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0hold primarily for trading purposes;<\/span><\/span><\/p>\n

ii.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0expect to be settled during your company\u2019s normal operating cycle;<\/span><\/span><\/p>\n

iii.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0expect to be due to be settled within the next 12 months after the reporting period.<\/span><\/span><\/p>\n

c.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0All other assets and liabilities are classified as non-current.<\/span><\/span><\/p>\n

2.<\/span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Presenting assets and liabilities\u00a0based on their liquidity<\/b>\u00a0and not just, but in order of their liquidity.<\/span><\/span><\/p>\n

At the end of the day the rationale behind making the choice from the two options comes down to whichever method provider more reliable and relevant presentation of information.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

First lets agree that the \u201cstatement of financial position\u201d you may have heard or read about is something we also like to call \u201cbalance sheet\u201d from time to time. Regardless of how you name it though, it still includes your company\u2019s assets, liabilities and equity balances. Name does not change the contents.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,48],"tags":[],"class_list":["post-4713","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-3-balance-sheet"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4713"}],"version-history":[{"count":3,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4713\/revisions"}],"predecessor-version":[{"id":4716,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4713\/revisions\/4716"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4713"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}