Kline Company refinanced current debt as long-term debt on January 5,2017.Kline's fiscal year ended on December 31,2016,and its financial statements will be issued sometime in early March 2017.Under IFRS,how would Kline classify the debt on its December 31,2016,balance sheet?
A)In the "mezzanine" between current and noncurrent liabilities.
B)Kline would not classify the debt as current or noncurrent,but rather would write a disclosure note explaining the circumstances.
C)As a noncurrent liability.
D)As a current liability.

Question

Quizplus · Accepted Answer

Under IFRS, debts are classified as current if they are expected to be settled within 12 months after the reporting period. Since Kline Company refinanced its current debt as long-term debt on January 5, 2017, it means the debt was due within the next 12 months as of December 31, 2016. Thus, the debt would be classified as a current liability on the December 31, 2016 balance sheet.

Kline Company Refinanced Current Debt as Long-Term Debt on January