Question:
Debentures repayable after 12 months or after the period of Operating Cycle from the date of Balance Sheet are shown in the Balance Sheet of a company under the head of:
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Debentures repayable after 12 months or after the period of Operating Cycle from the date of Balance Sheet are shown in the Balance Sheet of a company under the head of:
\
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Always check the "12-month" rule first. Anything due after 1 year is generally a Non-current liability.
Updated On: May 30, 2026
- Non-current Liabilities
- Current Liabilities
- Share Capital
- None of these
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The Correct Option is A
Solution and Explanation
Concept:
Under Schedule III of the Companies Act, 2013, liabilities are divided into Current and Non-current based on the time of settlement.
Step 1: Defining Current vs Non-current. A liability is Current if it is expected to be settled: 1. Within 12 months from the Balance Sheet date. 2. Within the normal operating cycle of the business. A liability is Non-current if: 3. It is expected to be settled after 12 months. 4. It is not expected to be settled within the operating cycle.
Step 2: Conclusion. Since the question specifies the debentures are repayable after 12 months or the operating cycle, they are classified as Non-current Liabilities and listed under the sub-head "Long-term Borrowings."
Step 1: Defining Current vs Non-current. A liability is Current if it is expected to be settled: 1. Within 12 months from the Balance Sheet date. 2. Within the normal operating cycle of the business. A liability is Non-current if: 3. It is expected to be settled after 12 months. 4. It is not expected to be settled within the operating cycle.
Step 2: Conclusion. Since the question specifies the debentures are repayable after 12 months or the operating cycle, they are classified as Non-current Liabilities and listed under the sub-head "Long-term Borrowings."
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