Company N has a 5-year note payable that will mature (come due) on March 17, 2014. Company N has an agreement with a local bank to refinance the liability by issuing a new note payable. On its December 31, 2013 balance sheet, N should

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According to the current GAAP guidelines, the classification of a liability as current or long-term is based on its due date, not on the intentions of the company to refinance it in the future. Therefore, Company N should report the note payable as a long-term liability on its December 31, 2013 balance sheet since it will mature in the following year. It is important to note that even if Company N refinances the liability before its due date, the classification of the liability on the December 31, 2013 balance sheet would not change.

Company N Has a 5-Year Note Payable That Will Mature