Size does not reveal the calendar
IAS 1 addresses presentation and classification of reporting items, while IAS 32 distinguishes a financial liability from equity through the substance of contractual obligations, subject to specified exceptions. Sources: **curr-stat-ias1**, About; **curr-stat-ias32**, About. This is a general framework: classification of a particular loan requires the full applicable text and facts at the reporting date.
Build a payment ladder
A fictional organisation must repay 90 in the first quarter, 40 in the second and 70 in the second half of the year, 200 in total. It has 35 available at the start. Before the first repayment, expected operating receipts after mandatory payments are 25; the model includes no confirmed new financing. First-quarter resources are 60, leaving a gap of 30.
Even if expected operating cash is sufficient for the full year, later receipts do not cover an early payment without an interim source. Expand annual forecasts into months or quarters, especially for seasonal businesses. The model does not treat expected cash as guaranteed; repeat it with lower receipts and later collection.
A covenant is a contractual test
A covenant may limit debt relative to a defined result, minimum liquidity or another action. Find the formula in the agreement: included obligations, permitted earnings adjustments, testing date, additional rights and cure procedures. The same ratio name in a presentation and a credit agreement does not prove the same definition.
Suppose a fictional agreement requires debt divided by an agreed annual measure to be no more than 3. Debt of 240 and a measure of 100 give 2.4. If the measure falls to 75 with debt unchanged, the ratio becomes 3.2. This shows denominator sensitivity, but without the agreement it cannot establish when a breach occurs or what legal consequences follow.
Headroom is not cash
The difference between an allowed ratio and the current value is not an amount of available credit. Borrowing depends on conditions, limits, collateral, other requirements and the counterparty’s decision. A signed credit line may also have drawdown conditions. Do not include the whole stated limit in liquidity without checking availability and restrictions.
A common error is treating refinancing as a natural continuation of the old loan. Maturity creates a concrete need; a future new loan remains an assumption until obligations of the parties are known. Another error is using a short public covenant summary as the exact contractual formula and displaying fictional headroom to tenths.
Checks and boundaries
Reconcile the maturity table to balance-sheet debt, separately identifying interest and other payments. Contractual undiscounted amounts can differ from the carrying amount; first explain the difference. Find collateral, guarantees, cross-default terms and restrictions on moving cash within a group.
This material does not determine whether a legal default or acceleration right exists. Use [balance sheet](/guides/balance-sheet/), [bonds](/guides/bonds/) and [interest coverage](/glossary/pokrytie-procentov/) for context. The result should be a calendar with explicit assumptions, not a “safe debt” label based on one annual ratio.
Model linked scenarios
A sales decline can simultaneously reduce receipts, worsen a covenant measure and make new financing harder. A stress model changing only one element may understate connected risks. Set a joint scenario and label which lender or market reactions are unknown. Do not present assumed credit availability in a bad scenario as a confirmed right.
Also distinguish obligation currency from the currency of future cash. The same maturity does not remove a mismatch if conversion occurs on uncertain terms. A positive balance in reporting currency can hide a specific payment need. No exchange-rate forecast is made here; currency mismatch is a separate execution uncertainty.
For a group, list borrowers and guarantors. Consolidated debt is useful for scale, but contractual rights arise between particular parties. If details are undisclosed, limit the conclusion to an aggregate maturity assessment.