Financial statement of a company | Part 2 - | Class 12 Accounts | CA Pradeep Assiwal

Non-Current & Current Liabilities in Company Balance Sheet 🎯 | Class 12 Accounts Chapter 10 Master the classification, sub-headings, and Notes to Accounts for Non-Current Liabilities (NCL) and Current Liabilities (CL) under Schedule III (Part I) of the Companies Act, 2013! Learn the Operating Cycle test, 12-month rule, classification of debentures, public deposits, trade payables, short-term borrowings, provisions, and other current liabilities to score full marks in your CBSE Board Exams! Hey Class 12 Commerce Superstars! 👋 Welcome back to our dedicated masterclass series on Chapter 10: Financial Statements of a Company (Analysis of Financial Statements). In Part 1, we tackled Shareholders' Funds and Share Capital Notes to Accounts. In today’s high-yield session, we master the remaining two major heads of the Equity and Liabilities side: Non-Current Liabilities (NCL) and Current Liabilities (CL). Board exams consistently test your ability to classify items under their precise Major Head and Sub-Head (often as 1-mark objective questions or 3-to-4 mark classification problems). In this comprehensive session, you will learn the universal Operating Cycle vs. 12-Month Rule, master the 4 sub-heads under Non-Current Liabilities, unpack the 4 sub-heads under Current Liabilities, and understand how items like current maturities of long-term debt, trade payables, and provisions are disclosed in the Notes to Accounts! What We Cover in This Masterclass: ⏳ Section 1: The Core Rule — Operating Cycle & The 12-Month Test Definition of an Operating Cycle: The time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The Dual-Condition Rule: When Operating Cycle is known (e.g., 10 months, 15 months, 18 months). The statutory 12-Month Default Rule when the operating cycle cannot be reliably identified. How to determine whether a liability is Current or Non-Current using the Operating Cycle test with live exam examples. 🏛️ Section 2: Non-Current Liabilities (NCL) — 4 Core Sub-Heads Long-Term Borrowings: Debentures / Bonds, Term Loans from Banks and other parties, Public Deposits, and Long-term Maturities of Finance Lease Obligations. Deferred Tax Liabilities (Net): Concept of accounting income vs. taxable income (brief overview for balance sheet presentation). Other Long-Term Liabilities: Trade payables with a payment period exceeding both the operating cycle and 12 months, premium payable on redemption of debentures/preference shares. Long-Term Provisions: Provision for Employee Benefits (Gratuity, Earned Leave Encashment, Provident Fund). ⚡ Section 3: Current Liabilities (CL) — 4 Core Sub-Heads Short-Term Borrowings: Loans repayable on demand (Bank Overdraft, Cash Credit), Short-Term Public Deposits, Loans from other parties repayable within 12 months/operating cycle. Trade Payables: Sundry Creditors and Bills Payable arising out of goods purchased or services received in the ordinary course of business. Other Current Liabilities: Current Maturities of Long-Term Debt (Debentures/Loans falling due within 12 months). Interest accrued and due on borrowings vs. Interest accrued but not due on borrowings. Income received in advance (Unearned Income), Unpaid/Unclaimed Dividend, Application money due for refund, Calls-in-Advance. Short-Term Provisions: Provision for Tax, Provision for Expenses, Provision for Employee Benefits due within 12 months. 📊 Section 4: Live Practical Drills & Board Exam Classification Tables Solving rapid-fire board exam questions: "Name the Major Head and Sub-Head for given items." Drafting statutory Notes to Accounts for Trade Payables and Short-Term Borrowings. Eliminating common student blunders that lead to negative marking. If this session made classifying Non-Current and Current Liabilities clear and scoring, please hit the 👍 Like button, Share this masterclass with your Class 12 batchmates, and Subscribe for our upcoming masterclass on Non-Current Assets and Current Assets under Schedule III! 💬 Class Challenge: State the Major Head and Sub-Head under Schedule III (Part I) of the Companies Act, 2013 for the following two items: (1) Unclaimed Dividend, and (2) Provision for Employee Gratuity payable after 4 years. Drop your answers in the comments below! 👇 #FinancialStatementsOfACompany #Class12Accounts #NonCurrentLiabilities #CurrentLiabilities #ScheduleIII #CompanyBalanceSheet #Class12Accountancy #CBSECommerce #CommerceClass12 #TSGrewalSolutions #DKGoelAccounts #OperatingCycle #BoardExamPrep2026 #AccountingPractical #CUETCommerce #AccountsRevision #AnalysisOfFinancialStatements