is a financial concept covered in this article. Long-Term Receivables Owed by Related Entities or Individuals
From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction.
Due from Related Parties Non Current represents amounts owed to the company by related parties—such as parent companies, subsidiaries, affiliates, joint ventures, key management, or major shareholders—where repayment is not expected within 12 months or the operating cycle. These long-term receivables often stem from loans, advances, or operational transactions within the group.
What It Represents
Due from Related Parties Non Current are balances the company is owed by entities or people with close ties—control, joint control, significant influence, or key management roles.
The non-current tag means collection is expected beyond one year, often because it’s structured as long-term funding or support.
These are the flip side of ‘Due to Related Parties’—here the company is the lender or provider.
“From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction.”
— Nassim Nicholas Taleb, Distinguished Professor of Risk Engineering, NYU Tandon School of Engineering Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (2001)
Common Examples
- Long-term loans to subsidiaries for expansion or working capital
- Advances to joint ventures for project funding
- Intercompany receivables from centralized operations
- Loans to executives or key employees (relocation, retention)
- Funding provided to affiliates or parent upstream
Big in multinational groups with treasury centers or holding company structures.
Accounting Treatment
Key rules:
- Recorded at amortized cost (if loan-like)
- Impute interest if below-market rate (except some intragroup under IFRS)
- Classify current/non-current by expected repayment
- Assess impairment (expected credit losses)
- Full disclosure: counterparty, terms, interest, balances
Related party rules demand transparency to spot potential favoritism.
Balance Sheet Presentation
Under non-current assets as:
- ‘Due from Related Parties Non Current’
- ‘Long-Term Receivables from Related Parties’
- ‘Non-Current Related Party Receivables’
- Sometimes netted only if legal offset right exists
Footnotes name parties, explain terms, and show movements.
Why These Balances Happen
- Efficient internal funding (cheaper than banks)
- Group cash management and treasury pooling
- Support for subsidiary growth or turnaround
- Tax optimization across jurisdictions
- Upstream loans in private/family businesses
What to Look Out For
- Interest income contribution (or lack if zero-rate)
- Repayment risk (subordinate to external creditors?)
- Impairment signals (struggling related party)
- Governance issues (loans to executives)
- Tax transfer pricing scrutiny
Large balances can tie up capital and hide group dependency or weak standalone position.