Core Current Liabilities

Posted in Finance, Accounting and Economics Terms, Total Reads: 1474
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Definition: Core Current Liabilities

Core Current Liabilities are those liabilities that are absolutely necessary for smooth functioning of the business.

Current liabilities of a business are liabilities which are generally short term in nature, which have to be serviced mostly within a year. Current liabilities on a general balance sheet of a company include accruals, short term loans, payables etc.

Non-core liabilities include those liabilities which are not a necessity for the business to survive, however form an important part in growth of the business and other opportunities.

 

Example:

For a retail bank like Axis Bank, the traditional retail deposits by households form the chunk of its liabilities, which are necessary for it to survive. These liabilities are called core liabilities. If they are deposits that are short term in nature, they are referred to ‘core current liabilities’.

However, today the pace of credit requirements has surpassed the retail deposits, and to ensure that the bank functions without forgoing business opportunities, there is a need to manage non- core liabilities as well.

Hence, this concludes the definition of Core Current Liabilities along with its overview.

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