A current liability has two important features. A company expects to pay the debt from existing current assets or through the creation of other current liabilities. The company will pay the debt within one year or the operating cycle, whichever is longer. To be classified as a current liability a debt must be expected to be paid out of existing current assets and by creating other current liabilities. Non current liabilities are a companies long term financial obligation that are not due within the present accounting year.
