Question

What are "current portions of non-current liabilities"? How are they treated on the balance sheet and why?

Answer 1

Current portions of non-current liabilities is the amount that will be due within one year of the balance sheet date or within opeating cycle of the business, whichever period is longer. This amount is reported as current liability in balance sheet. For example You have a $500,000 loan, $30,000 of which is due next year, Long-Term Liabilities= $470,000 long-term loan, Current Liabilities= $30,000 short term loan.

Current portions of non-current liabilities is reported as current liability in balance sheet because current liability has a feature of being repaid within one year from its balance sheet date or within opeating cycle of the business, whichever period is longer.