Anyone care to give example of each of these categories of Liabilities?
Mortgage loans are a great example. Although a mortgage might be payable over 30 years, there is a current portion (the amount due within the next year) that can be classified as a current liability. At the start of a fiscal year, I typically post adjusting entries (JE's) to move the current portion of a mortgage from long-term to current, leaving the remainder in long-term. This distinction is also made on the balance sheet for business tax returns.
For businesses that utilize various ratios for financial analysis purposes, the classification of assets and liabilities in current or long-term categories can have a big impact. For businesses with bank loans and other creditors, these ratios can be important for meeting loan/credit requirements.
IC loans can be classified as both as well, depending on the repayment terms and nature of the particular transactions that make up the loans.
