Read the following passage and answer the following question.

ABC Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of XYZ Ltd. at an agreed value of ₹6,30,000. ABC Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to XYZ Ltd. in full satisfaction of the purchase price. ABC Ltd. writes off any capital losses incurred during a year, at the end of that financial year.

Under which main head 'debenture' is shown in the company's balance sheet?

Non current liabilities

The correct answer is option 1- Non current liabilities.

Debenture is shown under subhead long term borrowing and main head non current liabilities.

NON-CURRENT LIABILITIES shall include the liabilities due after one year. It shall include the following:

• Long-term Borrowings: Such as Debentures, Loan from Bank, Loan from other parties.
• Deferred Tax Liabilities.
• Other Long term Liabilities: Such as Premium Payable on Redemption of Debentures; Premium Payable on Redemption of Preference Shares, Public Deposits (Unless specified, it will be assumed that deposits are for more than one year.)
• Long-term Provisions: Such as Provision for Employee Benefits, Provision for Provident Fund, Provision for Warranties.