What is typically considered a Non-Current Liability?

A non-current liability refers to obligations that are not expected to be settled within one year, meaning they are long-term in nature. A loan fits this definition as it is often a financial obligation that a business takes on and typically requires repayment over a period longer than one year. Loans usually involve a principal amount and interest, and the repayment terms reflect the long-term nature of the liability.

In contrast, accounts payable and GST payable are examples of current liabilities since they are obligations that are expected to be paid off within the short term, usually within a year. Sales, on the other hand, represent revenue generated by a business and are not classified as liabilities at all. Thus, the identification of a loan as a non-current liability is aligned with the typical classification of liabilities in accounting.