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Current liabilities are obligations that must be paid within the next fiscal year. In North America, they are shown first in the liabilities section of the balance sheet and listed in order of their due dates. Bank loans are shown first. Examples of current liabilities include:
- bank loans (or borrowings) that are payable on demand or due within the next 12 months (or next operating cycle, whichever is longer)
- accounts payable
- accrued liabilities such as interest payable, wages payable, and income taxes payable
- unearned revenue, and
- the current portion of non-current liabilities; that is, the amount that will be paid in the next fiscal year. For example, assume a $30,000 bank loan is issued on December 31, 2015 and this amount is to be repaid at the rate of $1,000 at the end of each month over two years. The current portion of this loan on the December 31, 2015 balance sheet would be $12,000 (calculated as 12 months X $1,000/month). The remaining principal ($18,000) would be reported on the December 31, 2015 balance sheet as a non-current liability.
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