Non-Interest-Bearing Current Liability (NIBCL)

What Is a Non-Interest-Bearing Current Liability (NIBCL)?

A non-interest-bearing current liability (NIBCL) is a category of expenses that an individual or a company must pay off inside the calendar year however won't owe interest on. Taxes that do exclude late punishments, as well as accounts payable, inside the credit terms courses of events or without late fees, are instances of NIBCLs that can be found on a company's balance sheet.

NIBCLs are listed on a balance sheet under the liabilities column, in the current liabilities section.

Grasping NIBCL

Non-interest-bearing current liabilities are moderately direct. Interest-bearing current

liabilities, like working capital loans or the current portion due on long-term debt, can be more complicated.

Notwithstanding non-interest-bearing current liabilities, a balance sheet might list non-interest-bearing non-current liabilities. This shows a debt that must be paid over a year later however isn't building interest.

Non-interest-bearing liabilities that are not due for payment until a later period are listed separately.

A large number of non-interest-bearing non-current liabilities in a balance sheet is considered to be a warning sign that a company is stacking up expenses that it might experience difficulty paying down the road.

NIBCL for Regular People

Individuals, as well as corporations, have non-interest-bearing current liabilities.

Assuming a person made up a balance sheet that seemed to be a corporate financial document, costs, for example, rent and utilities would go under NIBCL. A mortgage or vehicle payment, notwithstanding, would be an interest-bearing liability.

Non-interest-bearing consumer debt is very much rare, yet a consumer with a decent early on deal on a credit card would have the option to record the current balance on the card as a NIBCL.

Instances of a consumer's non-interest bearing non-current liability are somebody who leased another vehicle or outfitted a home involving one of those no-payment-for-30 to 180-days deals could log the future payments as non-interest-bearing non-current liabilities.

Another model that is trending now is a fintech product called Buy Now Pay Later (BNPL) that gives consumers offers to buy products and pay them through portions with no interest accused if in line of the terms.

One Oddity in NIBCL

A bond or a note might be a NIBCL in the event that it bears no interest. That is, a few investments in debt pay no interest except for are sold at a discount to their face values. The financial backer's profit comes with the return of the original investment at its full face value when the note arrives at maturity.

Illustration of NIBCL

The Kroger Co. possesses an extensive variety of natural store names like Dillons, Pay-Less Supermarkets, and Ralph's as well as the Kroger stores. It listed the accompanying under Current Liabilities on its balance sheet:

1. Current portion of long-term debt including obligations under capital rents and financing obligations
2. Trade accounts payable
3. Accrued salaries and wages
4. Deferred income taxes
5. Other non-interest-bearing liabilities, which are regularly not broken down in that frame of mind to the Financial Statements.

Features

• Corporate balance sheets recognize obligations to pay debts with interest and obligations to pay ordinary expenses like account receivables.
• A non-interest bearing current liability is a thing in a corporate balance sheet that reflects short-term expenses and debts that are not building interest.
• Regardless, these are obligations due in one year or less.