{"id":37982,"date":"2023-10-18T08:53:30","date_gmt":"2023-10-18T08:53:30","guid":{"rendered":"https:\/\/swoopfunding.com\/za\/?post_type=business-glossary&p=37982"},"modified":"2025-04-24T14:48:14","modified_gmt":"2025-04-24T14:48:14","slug":"non-current-liabilities","status":"publish","type":"business-glossary","link":"https:\/\/swoopfunding.com\/za\/business-glossary\/non-current-liabilities\/","title":{"rendered":"Non-current liabilities"},"content":{"rendered":"

Definition<\/h3>\n

Non-current liabilities, also known as long-term liabilities<\/a>, are obligations<\/a> or debts that a company expects to settle or fulfil beyond the normal operating cycle, typically extending over a period longer than one year. <\/span><\/p>\n

What are non-current liabilities?<\/h3>\n

These liabilities play a vital role in a company’s financial structure and reflect its long-term financial commitments.<\/span><\/p>\n

Types of non-current liabilities:<\/span><\/p>\n

    \n
  1. Long-term debt<\/b>: This includes loans, bonds<\/a>, and other financial instruments with repayment schedules spanning several years.<\/span><\/li>\n
  2. Deferred tax liabilities<\/b>: These arise due to temporary differences between accounting and tax rules.\u00a0<\/span><\/li>\n
  3. Deferred revenue<\/b>: This is revenue received in advance for goods or services that will be provided in the future.<\/span><\/li>\n
  4. Pension obligations<\/b>: Liabilities related to employee retirement benefits, including pensions and post-retirement healthcare.<\/span><\/li>\n
  5. Lease obligations<\/b>: Long-term lease agreements for assets like real estate or equipment.<\/span><\/li>\n
  6. Contingent liabilities<\/b>: These are potential obligations that arise from past events and will be confirmed only if certain future events occur.\u00a0<\/span><\/li>\n<\/ol>\n

    Non-current liabilities often involve the payment of interest. For instance, long-term debt incurs periodic interest payments in addition to the repayment of the principal.<\/span><\/p>\n

    Companies may choose to refinance or roll over their non-current liabilities by obtaining new loans or issuing new securities to repay existing ones. This is a common practice to manage long-term debt.<\/span><\/p>\n

    Non-current liabilities must be disclosed in a company’s financial statements<\/a>, usually in the notes to the financial statements. This includes details about the nature, terms, and conditions of these liabilities.<\/span><\/p>\n

    Example of a non-current liability<\/h3>\n

    Let’s consider a manufacturing company called “ABC Manufacturing” that obtains a long-term loan from a bank to finance the purchase of new machinery. The loan term is 5 years, and the company is required to make annual payments of R20,000 to repay the loan.<\/p>\n

    In this example, the long-term loan obtained by ABC Manufacturing would be classified as a non-current liability on the company’s balance sheet. This is because the loan obligation is not due for payment within the next accounting period, but rather over a longer period of time, beyond one year from the date of the balance sheet.<\/p>\n","protected":false},"author":1,"template":"","class_list":["post-37982","business-glossary","type-business-glossary","status-publish","hentry"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"

    Definition Non-current liabilities, also known as long-term liabilities, are obligations or debts that a company expects to settle or fulfil beyond the normal operating cycle, typically extending over a period longer than one year. What are non-current liabilities? These liabilities play a vital role in a company’s financial structure and reflect its long-term financial commitments. Types of non-current liabilities: Long-term debt: This includes loans, bonds, and other financial instruments with repayment schedules spanning several years. Deferred tax liabilities: These arise due to temporary differences between accounting and tax rules.\u00a0 Deferred revenue: This is revenue received in advance for goods or…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"root","url":"https:\/\/swoopfunding.com\/za\/author\/root\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/business-glossary\/37982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/business-glossary"}],"about":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/types\/business-glossary"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/users\/1"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/za\/wp-json\/wp\/v2\/media?parent=37982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}