When you have something listed in the category of current liabilities, it is you

Question

When you have something listed in the category of current liabilities, it is your intention to pay the obligation sometime within the next 12 months. However, is something is listed as a long-term liability; you have no idea whether it is due to be paid within 2 years or 20 years. Do you think it would be helpful if long-term liabilities were separated into different categories such as "obligations within the next 5 years," "obligations within the next 10 years," "obligations longer than 10 years," and so on?

Explanation / Answer

it is not required to state the long term liabilities as obligations within the next 5 years," "obligations within the next 10 years," "obligations longer than 10 years, because the statement of affairs / balance sheet states that liabilities are long term only for the period of 1 year.That is how its not required unless they are curremt liabilities which required to be stated with period of payment

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