What is the difference between non-current and current liabilities with examples?

Answer 1

The only different is when the liability becomes due. So current liabilities are within a year and non current is after one year.

Current liabilities would be things like Corporation tax, VAT, payroll taxes, trade creditors (Accounts Payable).

Non current liabilities could be things like long term loans, long term debentures, hire purchase schemes.

With long term liabilities, there may be an aspect of it that's due within a year and the rest in later years, such as for instance, a 4 year Loan. In that case you would show 1 year in current liability and 3 years in non current liability. This allowes users to see actually what is due in one year.

Answer 2

Current liabilities are liabilities that you can reasonably expect to pay off within one year or one accounting period.

Example: You purchase a computer for your business for $3,000 on account, you intend to pay this amount due in six months. This is a current liability.

Non-Current (sometimes referred to as Long-Term) liabilities are accounts that you can not or do not expect to pay off in less than a year.

Example: You purchase a new vehicle for $50,000 the financing on the vehicle is for 5 years. This is a Non-current liability because you can not nor do you expect to pay this balance off in a year (or less) or within one accounting period.