Current liabilities

What is current liabilities?

Current liabilities, also known as current or short-term liabilities, are the liabilities or debts that a company must cancel in a period of time less than or equal to one year.

Thus, they form part of the company's balance sheet together with assets (current and non-current) and non-current liabilities.

What differentiates current liabilities from non-current liabilities is the term that you have to pay the debt. With a current liabilities we will have commitments generated within the normal operating cycle and maturing within the accounting year, which has a duration of one year.

Classification of current liabilities

Current liabilities are made up of the following accounts:

• Providers: account that represents the value of merchandise purchases that the company makes on credit. The registered balance is creditor and is a short-term debt that the company has the obligation to pay.
• Various creditors: it constitutes the amount of the debts that the company has for a concept other than the purchase of merchandise or contracting of services of its main activity.
• Taxes: correspond to the percentage of the sale price that the company charges its customers (tribute) and that must be paid to the State within 12 months of the accounting year.
• Short-term deferred liabilities: obligations that a company has for income received in advance, to provide a service or make a sale in the future (within the year).
• Short-term provisions: It consists of establishing and maintaining an amount of resources as expenses, to be prepared in case an obligation that the company has already contracted previously must be paid.
• Short-term portion of long-term government debt: corresponds to the percentage of an obligation, generated by a loan or a credit granted by a financial institution to the company, which must be paid within a period of one year.