current maturities of long-term debt

Long-term obligations - bonds, notes, lease liabilities, deferred tax liabilities - are reclassified and reported as current liabilities when they become payable within the upcoming year.

Obligations callable by the creditor

Some debt is callable (due on demand) by the lender. This type of debt is classified as a current liability.

What is an example of callable debt?

As a condition of lending money to a company, lenders often attach loan covenants to the money lent. Loan covenants are conditions that must be met by the company; if the conditions are not met the lender can demand repayment immediately. For example, a bank may require a company to maintain a current ratio of 1.5. If the ratio falls below 1.5, the bank can demand complete repayment immediately.

When short-term obligations are expected to be financed

Short-term obligations can be reported as noncurrent liabilities if the company:

1. Intends to refinance on a long-term basis, and

2. demonstrates the ability to do so by a refinancing agreement or by actual financing.