Current maturities of long term borrowings

Borrowings & current maturities — SignReady guide

In this guide · 9 sections

Long-term or short-term: the classification test
Long term borrowings disclosure: the sub-heads and their particulars
Short term borrowings under Schedule III: CC, OD and loans repayable on demand
Current maturities of long term borrowings under Schedule III: where they go
Worked example: splitting a term loan with EMIs
Borrowing-linked regulatory disclosures
Before you sign: borrowings tie-outs
FAQs
Sources

Key points

Schedule III Division I splits borrowings into long-term borrowings (non-current liabilities, Note C) and short-term borrowings (current liabilities, Note F). The test is the Schedule III definition of a current liability — not the original tenure of the loan.
Long-term borrowings have seven sub-heads: bonds/debentures, term loans from banks and from other parties, deferred payment liabilities, deposits, loans and advances from related parties, long-term maturities of finance lease obligations, and others. Each is split secured / unsecured with the nature of security.
Since 1 April 2021 (G.S.R. 207(E)), current maturities of long-term borrowings are shown separately under short-term borrowings, not under other current liabilities. Current maturities of finance lease obligations still sit in other current liabilities.
ICAI's Guidance Note asks for the non-current and current portion of each category of long-term borrowings, by note, schedule or cross-reference — in addition to the separate current-maturities line.
Also required: loans guaranteed by directors or others, terms of repayment, period and amount of default at the balance sheet date, and the borrowing-linked regulatory items — quarterly returns to banks, wilful defaulter, charges not registered and use of borrowed funds.

Try SignReady: Set the current portion of each long-term loan in the draft — the notes follow.

Borrowings look like the easiest note in the accounts — a term loan, a cash credit and a director's loan — yet they carry more disclosure than almost any other line. Since the 2021 amendment, the current maturities of long term borrowings under Schedule III move out of other current liabilities and into short-term borrowings, and ICAI expects the current and non-current portion of each loan category to be visible. This guide sets out the Division I format line by line, the particulars each sub-head needs, a worked term loan split, and the regulatory items that hang off borrowings. It is part of our Schedule III guide; Ind AS companies follow Division II, which presents borrowings as financial liabilities and is not covered here.

Long-term or short-term: the classification test

Schedule III does not define "long-term". ICAI's Guidance Note on Division I (Revised January 2022) says the definition of a non-current liability may be used. A liability is current if any one of these applies; everything else is non-current:

it is expected to be settled in the company's normal operating cycle;
it is held primarily for trading;
it is due to be settled within twelve months after the reporting date; or
the company does not have an unconditional right to defer settlement for at least twelve months after the reporting date.

Three consequences for borrowings follow. A five-year term loan is split: instalments falling due in the next twelve months are current, the rest non-current. A cash credit or overdraft is repayable on demand, so it is current even if the bank renews it every year. And a loan from a director with no fixed repayment date — "payable when the company can" — needs an answer to one question: can the director call it at any time? If yes, the company has no unconditional right to defer, and it is current.

Covenant breaches need care. The Guidance Note's example: a five-year loan becomes recallable because the company missed a covenant, but the bank has not recalled it before the accounts are approved. For minor breaches it accepts continued non-current classification; where a material provision — a substantive one, such as a financial covenant — is breached on or before the year end, the loan becomes current unless the lender agrees, before the accounts are approved, not to demand payment. A loan actually recalled before approval for a pre-year-end breach is current. For the operating-cycle test in general, see current non current classification under Schedule III.

Long term borrowings disclosure: the sub-heads and their particulars

Note C of Part I of Schedule III prescribes these sub-heads. Show only those that apply, but in this order:

Sub-head	What usually goes here
(a) Bonds / debentures	With rate of interest and particulars of redemption or conversion, in descending order of maturity — farthest first; for instalment redemption, maturity is the date the first instalment falls due
(b) Term loans — (A) from banks, (B) from other parties	Machinery, building and vehicle loans; loans from NBFCs and financial institutions go under "other parties"
(c) Deferred payment liabilities	Amounts payable on deferred credit terms — the Guidance Note gives deferred GST/VAT and deferred payment for fixed assets as examples
(d) Deposits	Public deposits and inter-corporate deposits that are in the nature of borrowings — not trade or security deposits, which go to other liabilities
(e) Loans and advances from related parties	Director, relative and group-company loans in the nature of loans
(f) Long-term maturities of finance lease obligations	Lease liability beyond twelve months
(g) Other loans and advances (specify nature)	Anything else that is a borrowing

For every sub-head, Schedule III then requires:

Secured and unsecured separately, with the nature of security for each case. The Guidance Note says a blanket line such as "all term loans from banks are secured" is not enough, and the description should name the type of asset — inventories, property, plant and equipment and so on. One security covering several loans may be described once with a cross-reference.
Guarantees — the aggregate of loans guaranteed by directors or others under each head. "Others" means anyone other than a director, not only related parties. Security given by promoters, other shareholders or third parties from their own assets — such as a pledge of their shares — does not make the loan secured, but the Guidance Note asks for it to be disclosed.
Terms of repayment of term loans and other loans — the Guidance Note reads "other loans" as every category under long-term borrowings, and expects the maturity period, number and amount of instalments and the rate of interest; loans with similar terms may be aggregated.
Particulars of redeemed bonds/debentures that the company has power to reissue.
Period and amount of continuing default at the balance sheet date in repayment of loans and interest, separately for each case.

Director loans also feed the related party note — see related party disclosures under AS 18.

Short term borrowings under Schedule III: CC, OD and loans repayable on demand

Note F classifies short-term borrowings as:

(a) Loans repayable on demand — (A) from banks, (B) from other parties. Cash credit and overdraft limits sit here; in practice, packing credit and other working capital demand loans from banks are usually shown here too.
(b) Loans and advances from related parties.
(c) Deposits.
(d) Other loans and advances (specify nature).
(v) Current maturities of long-term borrowings, disclosed separately — inserted by G.S.R. 207(E) with effect from 1 April 2021.

The same secured/unsecured split with nature of security, the guarantee disclosure, and the period and amount of default at the balance sheet date apply. Schedule III says "continuing default" for long-term and "default" for short-term borrowings; the Guidance Note reads both as defaults existing at the balance sheet date, covering bonds, deposits, deferred payment liabilities and lease obligations too, not only items called "loans". A default during the year that was made good before the year end need not be disclosed, and defaults on covenants other than repayment of principal and interest are not part of this disclosure.

Split the loan once, carry it through

In SignReady's draft, the part of a long-term loan repayable within 12 months goes to Current maturities of long-term borrowings, and the editable Excel notes link to the Balance Sheet with previous-year figures — FinalCheck then flags notes that do not total to the face.

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Current maturities of long term borrowings under Schedule III: where they go

Before 1 April 2021, "current maturities of long-term debt" was the first item under other current liabilities. G.S.R. 207(E) omitted that item and added clause (v) to short-term borrowings. So from FY 2021-22 onwards:

Item	Where it goes now
Instalments of term loans, debentures, deposits and related party loans due within 12 months	Short-term borrowings — separate line "Current maturities of long-term borrowings"
Instalments beyond 12 months	Long-term borrowings, under the right sub-head
Current maturities of finance lease obligations	Still other current liabilities — G.S.R. 207(E) omitted only item (a) of Note G, and the Guidance Note (para 8.6.3) keeps the current portion of finance lease obligations there
Interest accrued but not due, and interest accrued and due, on borrowings	Other current liabilities — not borrowings
Unpaid matured deposits and debentures, with interest	Other current liabilities

The Guidance Note adds one more requirement that drafts often miss: to show users the total liability in each category of non-current borrowings, the company gives the non-current and current portion for each category — term loans from banks, from other parties, and so on — by a note, a schedule or a cross-reference, in addition to the current-maturities line. A single "current maturities" figure with no breakdown does not meet this.

Because the reclassification moves the current portion into current liabilities, re-check the current ratio after the split, and make sure the debt-equity and debt service coverage ratios use the same debt figures as the previous year — then explain any change of more than 25%. See Schedule III ratios and the 25% variance.

Worked example: splitting a term loan with EMIs

Example Pvt Ltd took a machinery term loan of ₹50,00,000 from a bank on 1 April 2024, at 9.5% a year, repayable in 60 monthly EMIs of ₹1,05,009 from 30 April 2024. It also has a vehicle loan from an NBFC, a cash credit limit of ₹1 crore against hypothecation of stock and book debts, and an unsecured loan from a director repayable after March 2028 under a written agreement. Figures are illustrative.

Step 1 — read the amortisation schedule, not the EMIs. Only the principal part of the next twelve EMIs is a current maturity; the interest part is a future finance cost.

Term loan from bank (₹)	31 March 2026	31 March 2025
Principal outstanding	32,78,165	41,79,785
Principal in the next 12 EMIs — current maturity	9,91,103	9,01,619
Balance — non-current	22,87,062	32,78,166
Interest charged to finance costs in the year	3,58,492	4,39,897

Taking 12 × EMI (₹12,60,108) as the current maturity is a common slip: it overstates current liabilities by the interest element and understates long-term borrowings. Note that this year's non-current portion is roughly what next year's opening principal will be after the current maturity is paid.

Step 2 — the long-term borrowings note.

Note: Long-term borrowings (₹)	31 March 2026	31 March 2025
Secured
Term loans — from banks (refer (i))	22,87,062	32,78,166
Term loans — from other parties (refer (ii))	3,80,000	6,40,000
Unsecured
Loans and advances from related parties — directors (refer (iii))	15,00,000	12,00,000
Total	41,67,062	51,18,166

(i) Secured by hypothecation of plant and machinery purchased from the loan and personally guaranteed by two directors; repayable in 60 monthly instalments of ₹1,05,009 from April 2024, 36 instalments outstanding at 31 March 2026; interest 9.5% a year. (ii) Secured by hypothecation of the vehicle; repayable in monthly instalments to July 2028. (iii) Repayable after 31 March 2028 under agreement; interest 10% a year. Aggregate of long-term borrowings guaranteed by directors: ₹22,87,062 (previous year ₹32,78,166); the current portion of the same loan is in short-term borrowings. No default in repayment of principal or interest at the balance sheet date.

Step 3 — the short-term borrowings note.

Note: Short-term borrowings (₹)	31 March 2026	31 March 2025
Secured
Loans repayable on demand — from banks: cash credit (hypothecation of inventories and trade receivables; personally guaranteed by directors)	84,50,000	71,20,000
Current maturities of long-term borrowings (refer note on long-term borrowings)	12,51,103	11,36,619
Total	97,01,103	82,56,619

Aggregate of short-term borrowings guaranteed by directors: ₹94,41,103 (previous year ₹80,21,619) — the cash credit plus the current maturity of the bank term loan. No default at the balance sheet date.

Step 4 — the category-wise split the Guidance Note asks for.

31 March 2026 (₹)	Non-current	Current	Total
Term loans from banks	22,87,062	9,91,103	32,78,165
Term loans from other parties	3,80,000	2,60,000	6,40,000
Loans from related parties	15,00,000	—	15,00,000
Total	41,67,062	12,51,103	54,18,165

The "Total" column should agree to the loan statements and the trial balance — the bank's and the NBFC's year-end statements are the evidence. Show the same split for the previous year.

Borrowing-linked regulatory disclosures

Several items in the additional regulatory information (paragraph Y of the general instructions for the Balance Sheet) and the notes hang off borrowings:

Item	When it applies	What to disclose
Y(vii) Quarterly returns or statements of current assets	Borrowings from banks or FIs on the security of current assets — the Guidance Note applies it if such borrowings existed at any time in the year, includes sanctioned but unused limits, and counts both fund-based and non-fund-based facilities	Whether the quarter-end stock and book-debt statements agree with the books; if not, a summary of reconciliation and reasons for material differences, quarter by quarter
Y(viii) Wilful defaulter	Declared by any bank, FI or other lender — events up to the approval of the accounts count	Date of declaration; amount and nature of defaults
Y(x) Charges or satisfaction not registered	A charge or satisfaction not registered with the Registrar within the statutory period	Details and reasons — the Guidance Note suggests a description, the Registrar's location, the delay and the reason
Note VA — use of bank/FI borrowings	Borrowings not used for the specific purpose for which they were taken, still outstanding at the year end	Where they have been used — judged on the overall balance sheet position, not rupee for rupee
Y(xiv) Utilisation of borrowed funds and share premium	Funds routed through intermediaries to ultimate beneficiaries, or received from a funding party on that understanding	Dates, amounts, parties and the FEMA / PMLA compliance declaration

The Schedule III disclosure on quarterly returns has no threshold. The auditor's own reporting under CARO 2020 paragraph 3(ii)(b) applies where, at any point of time during the year, working capital limits of more than ₹5 crore in aggregate have been sanctioned on the security of current assets. Paragraph 3(ix) covers defaults, wilful defaulter status, use of term loans, short-term funds used for long-term purposes and, for groups, funds raised for subsidiaries, associates or joint ventures. The accounts and the CARO report should tell the same story — see CARO 2020 clauses that are easy to get wrong.

Before you sign: borrowings tie-outs

Every loan in the trial balance appears once, under the right sub-head, and the current plus non-current total agrees to the lender's year-end statement.
Current maturities are the principal in the next twelve months, from the amortisation schedule — not twelve EMIs.
Cash credit and overdraft are in short-term borrowings, never netted against bank balances in the asset side.
Director loans: repayment terms agreed in writing support non-current classification; "repayable on demand" means current.
Nature of security described for each secured loan; guaranteed loans aggregated; repayment terms and rate of interest stated.
Interest accrued sits in other current liabilities; finance lease current maturities there too.
Defaults at the year end disclosed with period and amount; the CARO answer on defaults agrees.
Quarterly-return comparison done for each quarter where current-asset security exists.
Previous-year figures re-presented in the same layout.

Misplaced current maturities are among the Schedule III mistakes in small company accounts that are easiest for a reader to spot, because the ratios move with them.

Try SignReady: FinalCheck the borrowings notes against the face and the trial balance before signing.

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Frequently asked questions

Where is current maturity of long-term debt shown in Schedule III?

Under Division I, from 1 April 2021 current maturities of long-term borrowings are shown as a separate line under short-term borrowings (Note F(v)), not under other current liabilities. The exception is current maturities of finance lease obligations, which Schedule III still lists under other current liabilities.

Is cash credit a long-term or short-term borrowing?

Short-term. Cash credit and overdraft facilities are loans repayable on demand, so the company has no unconditional right to defer settlement for twelve months. They are shown under short-term borrowings — loans repayable on demand from banks — even when the limit is renewed every year.

How do I calculate the current maturity of a term loan with EMIs?

Take the principal component of the instalments falling due in the twelve months after the balance sheet date from the loan's amortisation schedule. Do not use twelve times the EMI: the interest included in the EMIs is a future finance cost, not a liability at the year end.

Is a loan from a director a long-term borrowing?

It depends on the terms. If the agreement gives the company the right to defer repayment for more than twelve months after the year end, it is long-term, under loans and advances from related parties. If the director can call for repayment at any time, it is current and goes under short-term borrowings.

Do small companies have to give the borrowings disclosures?

Yes. Schedule III does not exempt small companies from the borrowings classification, security, guarantee, repayment terms and default disclosures, or from the additional regulatory information on quarterly returns, wilful defaulter and charges. Small company status affects other matters such as CARO and the cash flow statement.

Sources

Borrowings that tie out before the partner looks

In SignReady, the draft Schedule III statements from the trial balance, the eleven ratios with variance reasons, FinalCheck, CARO, queries and review points sit in one finalisation. First 3 finalisations free.

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About this guide. Written by the SignReady Team at PracticeGuru (Brainy Accountant Solutions Pvt Ltd). SignReady is our product and is mentioned where it fits. The guide reflects the law and standards as at 18 October 2026 and the sources listed above. It is general information, not professional advice: check the primary sources and apply your own professional judgement to each engagement.
Version history: 18 Oct 2026 — first published.