Alpha Tech Limited, an Indian listed company, has availed on 1st July 2024, a short-term loan facility of 50.00 crore from XYZ Bank Limited…

(i) The loan taken by Alpha Tech Limited is not due for payment at the end of the reporting period. The entity and the bank have agreed for the roll-over of the outstanding loan prior to the end of the reporting period for a period of 5 years. Since the entity has an unconditional right to defer the settlement of the liability for at least twelve months after the reporting period, the loan should be classified as non-current. (ii) Yes, the answer will be different if the arrangement for roll over is agreed upon after the end of the reporting period, since assessment is required to be made based on terms of the existing loan facility. As at the end of the reporting period, the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Hence the loan is to be classified as current. (iii) Yes, loan facility arranged with new bank cannot be treated as refinancing, as the loan with the earlier bank would have to be settled which may coincide with loan facility arranged with a new bank. In this case, loan has to be repaid within a period of three months from the end of the reporting period, therefore, it will be classified as current liability. (iv) Yes, the answer will be different and the loan should be classified as current. This is because, as per paragraph 73 of Ind AS 1, when refinancing or rolling over the obligation is not at the discretion of the entity (for example, there is no arrangement for refinancing), the entity does not consider the potential to refinance the obligation. Therefore, it has to classify the loan obligation as current.