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7252569-MIdterm-1 (dragged) 3

7252569-MIdterm-1 (dragged) 3 - Kieso Weygandt Warfield...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 13-4 11. The currently maturing portion of long-term debts may be classified as a current liability. When a portion of long-term debt is so classified, it is assumed that the amount will be paid within the next 12 months out of funds classified as current assets. Refinancing 12. Certain short-term obligations expected to be refinanced on a long-term basis should be excluded from current liabilities. Under CICA Handbook Section 1510, a short-term obligation is excluded from current liabilities if contractual arrangements have been made for settlement from other than current assets. Emerging Issues Committee Abstract ( EIC 122 ) requires that both of the following criteria be met in order to be classified as non-current: a) the entity must intend to refinance; and b) the entity must demonstrate an ability to consummate the refinancing. In comparison, International Accounting Standards require that liabilities that are being
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