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C H A P T E R 13 CURRENT LIABILITIES, PROVISIONS, AND CONTINGENCIES This IFRS Supplement provides expanded discussions of accounting guidance under In- ternational Financial Reporting Standards (IFRS) for the topics in Intermediate Account- ing. The discussions are organized according to the chapters in Intermediate Accounting (13 th or 14 th Editions) and therefore can be used to supplement the U.S. GAAP require- ments as presented in the textbook. Assignment material is provided for each supplement chapter, which can be used to assess and reinforce student understanding of IFRS. Chapter 13 Current Liabilities, Provisions, and Contingencies 131 CURRENT MATURITIES OF LONG-TERM DEBT Delhaize Group (BEL) reports as part of its current liabilities the portion of bonds, mort- gage notes, and other long-term indebtedness that matures within the next fiscal year. It categorizes this amount as current maturities of long-term debt . Companies, like Delhaize, exclude long-term debts maturing currently as current liabilities if they are to be: 1. Retired by assets accumulated for this purpose that properly have not been shown as current assets, 2. Refinanced, or retired from the proceeds of a new debt issue (discussed in the next section), or 3. Converted into ordinary shares. When only a part of a long-term debt is to be paid within the next 12 months, as in the case of serial bonds that it retires through a series of annual installments, the company reports the maturing portion of long-term debt as a current liability , and the remaining portion as a long-term debt. However, a company should classify as current any liability that is due on demand (callable by the creditor) or will be due on demand within a year (or operating cycle, if longer). Liabilities often become callable by the creditor when there is a violation of the debt agreement. For example, most debt agreements specify a given level of equity to debt be maintained, or specify that working capital be of a minimum amount. If theto debt be maintained, or specify that working capital be of a minimum amount.... View Full Document

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