Final answer:
A non-current liability is reclassified as a current liability when it is due to be settled within one year from the reporting date or within the company's operating cycle,
whichever is longer, or when there has been a violation of a loan agreement prompting immediate reclassification.
Step-by-step explanation:
You can reclassify a non-current liability to a current liability when it meets the criteria to be considered due within the next 12 months.
Reclassification typically occurs for liabilities whose payment date is approaching within the company's next fiscal year or operating cycle, if longer. For example, a long-term loan can be reclassified as a current if it's due to be paid in the coming year.
Also, the violation of a loan agreement that results in the loan being payable on demand can prompt immediate reclassification to current liability.
A non-current liability is reclassified as a current liability when it is due to be settled within one year from the reporting date or within the company's operating cycle,
whichever is longer, or when there has been a violation of a loan agreement prompting immediate reclassification.