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pradeep gupta · Oct 3, 2009, 01:59 AM

Is demand long a short term liablity or long term liablity

morgaine300 · Oct 3, 2009, 03:54 AM

What is "demand long"?

pradeep gupta · Oct 3, 2009, 04:44 AM

Its demand loan

rehmanvohra · Oct 3, 2009, 05:02 AM

A loan payable on demand is considered a short term liability since the lender can demand repayment immediately under given circumstances.

pradeep gupta · Oct 3, 2009, 05:19 AM

Thanks

pradeep gupta · Oct 3, 2009, 05:24 AM

Is it correct to consider investment as non current asset
Because investment is done out of surplus funds and not avialable for company use

Need your inputs

rehmanvohra · Oct 3, 2009, 05:33 AM

Depends on the intention of the management. If the investments have been made from surplus funds, the usual contention is that the investment has been made for a temporary period.

A long term investment takes the form of investment in shares of another company with a view to achieve control. This is evidently for a longer period and hence shown as Long Term Investments.

pradeep gupta · Oct 3, 2009, 05:48 AM

Can u please advice Will short term investments qualify as current assests

In my view no beause as reasons given before

What is your view

rehmanvohra · Oct 3, 2009, 10:05 AM

Pradeep, I have made it clear that if the investment is for a temporary period then it can be classified as current asset.

Is it correct to consider investment as non current asset
Because investment is done out of surplus funds and not available for company use

Your statement is not clear. Literally taken you suggest that:
1. Investment is made of surplus funds, and
2. Not available for company use.

When you use "and" do you mean to say that the Investment is not available to company use?

morgaine300 · Oct 6, 2009, 06:28 PM

I think this is a bit confusing too. As rehmanvohra suggested, surplus funds are generally intended to be temporary so that the surplus funds are not just sitting around being useless.

In post #8 you said "short-term" investments. That implies to me that it's current, yes.

The word "intent" is important here. What may actually happen in the long-run cannot be known 100%, but you follow what the company's intent is -- that is, what do they think they're going to do? If they're meant to be short-term usage of surplus funds, I don't understand why they wouldn't be available for use. "Not available" to me implies either that these funds are for a longer-term usage and the company chooses not to have them available for other uses, or that there has been some kind of restriction placed on something.

If this is for homework, it might be useful to quote it exactly. If it's real stuff, then you need to find out more about it, or just stick it some place and allow your accountant to straighten it up later.