6 :- State giving reason whether Trade Receivables are classified as Current Assets or Non – Current Assets in the Balance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases;
Solution :-
Case – 1 – Current Assets
Reason:- Assets realisable within the 12 months period are classified as current assets irrespective of the operating cycle period.
Case – 2 – Current Assets
Reason:- Assets realisable within the 12 months period are classified as current assets irrespective of the operating cycle period.
Case – 3 – Non-Current Assets
Reason:- Here Trade Receivables realised after 12 months and it is also realised after the operating cycle of the business.
Case – 4 – Current Assets
Reason:- Here However Trade Receivables realised in 13th months but it is less than the operating cycle of the business. The assets realised within the operating cycle of the business are classified as Current Assets
Case – 5 – Non-Current Assets
Reason:- Here Trade Receivables realised in 16th months but it is after the operating cycle of the business that is 15 months.