Non-Current Liabilities
Also called: Long-term Liabilities
A group, no postings. It totals debts due after more than one year: long-term loans, lease liabilities, employee benefits, deferred tax, grants and provisions.
In detail
Non-Current Liabilities groups the debts that fall due more than twelve months after the Balance Sheet date: term loans, long leases, gratuity owed to staff, deferred tax, deferred grants and long-term provisions. It takes no postings itself; each loan or provision has its own ledger beneath it and the group adds them up. The split between non-current and current matters because a bank or investor judges liquidity by comparing current liabilities with current assets, and a wrongly placed long-term loan makes the business look unable to pay its way. At each Ashadh end, move the instalments falling due in the next year from the non-current loan ledger to its current partner with a Journal Entry.
Formula
Non-Current Liabilities = sum of loan, lease, benefit, deferred tax, grant and provision ledgers due after twelve months
How to record it in BRAccount
- 01Go to Accounts Setup > Chart of Accounts, expand Liabilities, then Non-Current Liabilities.
- 02Open any ledger beneath it to read its General Ledger.
- 03When a loan is taken, post a Journal Entry crediting the matching ledger here.
- 04At Ashadh end, reclassify next year's instalments to the current ledger by Journal Entry.
- 05Read the group total on Financial Reports > Balance Sheet.
When to use it
Do not post here. Pick the specific child account such as Loans and Borrowings - Non-Current.
Example from the demo books
A five-year bank loan of Rs 20,00,000 sits under Non-Current Liabilities, except the next twelve months of instalments.