Last update 25/08/2019
Trade and other payables are liabilities (in general payable short term ie within one year) showing separately amounts payable to trade suppliers, payable to related parties, deferred income and accruals (with for example corporate income tax and social securities as separate reporting lines based on local GAAP or reporting habits).
A trade payable is an amount billed to a company by its suppliers for goods delivered to or services consumed by the company in the ordinary course of business. These billed amounts, if paid on credit, are called trade (accounts) payable. Any amounts owed to suppliers that are immediately paid in cash are not considered to be trade payables, since they are no longer a liability.
In the accounting system, trade payables are recorded in a separate accounts payable account, with a credit to the accounts payable (control) account in the general ledger and a debit to whichever account most closely represents the nature of the payment, such as an expense to profit or loss or an addition to an asset (for example property, plant and equipment or inventories).
Trade payables are nearly always classified as current liabilities, since they are usually payable within one year. If that is not the case, then such payables can be classified as long-term liabilities. A longer-term liability typically has an interest payment associated with it, and so is more likely to be classified as long-term debt.
Other types of payables, such as accrued expenses, dividends payable, or wages and social securities payable, are recorded in other accounts in order to more easily identify them.
A key difference between trade payables and non-trade payables is that trade payables are typically part of the purchase process of an operation activity, whereas non-trade payables are typically entered a part of the payroll process or monthly, quarterly or annual financial close process.
Trade and other payables
Trade and other payables
Trade and other payables Trade and other payables Trade and other payables Trade and other payables