Short term and long term

[profclaudiom]

Hi everybody

About the specific periodo to classification in short term and long term, always should be in relation December, or it´s possible to consider 12 months independent that month closed the statements?
According IFRS and USGAAP, is the same interpretation?
To all have a nice day
Cláudio Cordeiro

 

[bklynboy]

Short term is one year or less from the balance sheet date - this does not have to be December. Same for GAAP and IFRS.

 

[profclaudiom]

I have certain it´s important to consider the operating cycle that company is envolved, because sometimes it´s possible to classify short term with more than 12 months
Depends the nature of company.

 

[bklynboy]

Sorry. Its the longer of one year or operating cycle. Generally operating cycle is less than 1 year but not always so.

 

[josefuertesm]

According to IFRS you must look the paragraph 66 and 69 of IAS 1... They classify the assets and liabilities according to a current and non-current classification. In those paragraph the standard explain the characteristics of those elements.

 

[big_jd50]

Generally Financial Statements are prepared on the basis of 12 months/ 1 year. If the operating cycle is likely to be more than this then short term should be the period of the operating cycle and not 12 months.