Editing Current liability (section)

==Classification==
As provided by IAS 1, paragraph 69, a liability is classified as current if any of the following conditions are met:<ref>{{Cite web |date=2021 |title=IAS 1 Presentation of Financial Statements |url=https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ias-1-presentation-of-financial-statements.pdf?bypass=on |website=IFRS Foundation}}</ref> 
*it is expected to be settled in the entity's normal operating cycle;
*it is held primarily by the entity for trading purposes;
*it is due for settlement within twelve months after the reporting period; or
*there is no right to defer settlement for at least twelve months after the reporting period.

Beginning on January 1, 2024, the [[International Accounting Standards Board]] amended IAS 1 with regards to the classification of certain liabilities as current or noncurrent in the presentation in financial statements. Previously, the IAS 1 required that, for a liability to be classified as current, it must not have an "unconditional right" to be deferred for at least 12 months after the reporting date. The board removed this requirement, instead, the right to postpone the settlement must have substance and should exist at the reporting date.<ref>{{Cite web |title=Classifying liabilities as current or non-current |url=https://kpmg.com/xx/en/our-insights/ifrg/2024/classifying-liabilities-current-non-current-amendments-ias1.html |access-date=2025-02-16 |website=KPMG |language=en}}</ref>

Trade payables and accruals for employee and operating costs are considered part of working capital in an entity’s normal operating cycle and are classified as current liabilities, even if they are settled more than twelve months after the reporting period. Specifically, these items are classified as current if due within one year or the duration of the operating cycle, whichever is longer. If the normal operating cycle is not clearly defined, it is assumed to last twelve months.<ref name=":1">{{Cite book |last1=Valix |first1=Conrado T. |url=http://www.library.kcp.edu.ph/cgi-bin/koha/opac-detail.pl?biblionumber=17890&shelfbrowse_itemnumber=22736 |title=Intermediate accounting, volume two |last2=Peralta |first2=Jose F. |last3=Valix |first3=Christian Aris M. |date=2024 |publisher=GIC Enterprises & Co., Inc |isbn=978-621-416-140-9 |edition=2024 |location=Manila, Philippines}}</ref>{{Rp|page=4}}

Additionally, other current liabilities not part of the normal operating cycle are also classified as current if they are due for settlement within twelve months after the reporting period or are held primarily for trading purposes. Examples of these other current liabilities include financial liabilities held for trading, bank overdrafts, dividends payable, income tax payable, other non-trade payables due within a year, and the current portion of non-current financial liabilities.<ref name=":1" />{{Rp|page=4}}