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Is a revolving credit facility llisted as a current liability or a long term debt?

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Is a revolving credit facility llisted as a current liability or a long term debt?

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  1. Sounds like a homework question.


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  3. The revolving credit facility (the facility itself) is neither. Think of the facility as a promise - the bank's promise to the company that the company will be able to borrow money from the bank when it needs to.

    Money borrowed by the company under its revolving bank credit facility is usually due to be repaid to the bank by the company in 1-5 years. Current liabilities are usually within a year of needing to be paid, so it is not a current liability.

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