Sign up to save your podcasts
Or
Share 1.10: Non-current Liabilities [IAS 1]
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
1.10: Non-current Liabilities [IAS 1]
In this episode 🎙️, we zoom out from short-term liquidity stress and look at the long game 🏗️ — Non-Current Liabilities.
These are the strategic obligations that fund expansion, acquisitions, and long-term growth 📈. From bond issuances 🏦 to pension deficits 👥, we break down how they’re recognized, measured, and—most importantly—classified under IAS 1.
Because classification isn’t cosmetic. It shapes how investors read solvency.
What we cover in this episode:
• The “Right to Defer” Test ⏳
The key IAS 1 principle: a liability is non-current only if the entity has a right to defer settlement for at least 12 months at the reporting date.
No right? It’s current. Period.
• Financial Liabilities 💳
Long-term loans, bonds, debentures.
Measured under IFRS 9 — typically at Amortized Cost, unless designated at Fair Value through P&L.
Effective interest method isn’t optional. It’s mandatory.
• The Current Portion 🔄
Even a 10-year loan has a slice due within 12 months.
That portion must move to current liabilities.
Splitting correctly matters for working capital ratios.
• Provisions & Post-Employment Obligations ⚖️
Long-term estimates like legal claims (under IAS 37) and pension obligations (under IAS 19).
Recognize present obligations, measure best estimates, discount when material.
• Deferred Tax Liabilities 🧮
The “invisible” obligation created by temporary differences under IAS 12.
No cash today — but future tax consequences are real.
• Presentation & Disclosure 📊
Explaining the maturity profile of debt, covenant risks, and liquidity buffers so users can assess long-term solvency clearly.
🔥 A Pro-Tip for your SOCPA Prep
Refinancing (Rollover) scenarios are a classic trap 🚨.
If the company has discretion under an existing facility to roll over the obligation for at least 12 months → classify as Non-Current ✔️
If refinancing requires negotiating a new agreement with a new lender → it stays Current ❌
Even if management is “99% sure” the deal will close.
IAS 1 doesn’t care about optimism.
It cares about rights existing at the reporting date 🎯.
Get this wrong, and your solvency picture shifts overnight.
View all episodes
By MAFIn this episode 🎙️, we zoom out from short-term liquidity stress and look at the long game 🏗️ — Non-Current Liabilities.
These are the strategic obligations that fund expansion, acquisitions, and long-term growth 📈. From bond issuances 🏦 to pension deficits 👥, we break down how they’re recognized, measured, and—most importantly—classified under IAS 1.
Because classification isn’t cosmetic. It shapes how investors read solvency.
What we cover in this episode:
• The “Right to Defer” Test ⏳
The key IAS 1 principle: a liability is non-current only if the entity has a right to defer settlement for at least 12 months at the reporting date.
No right? It’s current. Period.
• Financial Liabilities 💳
Long-term loans, bonds, debentures.
Measured under IFRS 9 — typically at Amortized Cost, unless designated at Fair Value through P&L.
Effective interest method isn’t optional. It’s mandatory.
• The Current Portion 🔄
Even a 10-year loan has a slice due within 12 months.
That portion must move to current liabilities.
Splitting correctly matters for working capital ratios.
• Provisions & Post-Employment Obligations ⚖️
Long-term estimates like legal claims (under IAS 37) and pension obligations (under IAS 19).
Recognize present obligations, measure best estimates, discount when material.
• Deferred Tax Liabilities 🧮
The “invisible” obligation created by temporary differences under IAS 12.
No cash today — but future tax consequences are real.
• Presentation & Disclosure 📊
Explaining the maturity profile of debt, covenant risks, and liquidity buffers so users can assess long-term solvency clearly.
🔥 A Pro-Tip for your SOCPA Prep
Refinancing (Rollover) scenarios are a classic trap 🚨.
If the company has discretion under an existing facility to roll over the obligation for at least 12 months → classify as Non-Current ✔️
If refinancing requires negotiating a new agreement with a new lender → it stays Current ❌
Even if management is “99% sure” the deal will close.
IAS 1 doesn’t care about optimism.
It cares about rights existing at the reporting date 🎯.
Get this wrong, and your solvency picture shifts overnight.