In an important legal case, the Australian Securities and Investments Commission successfully sued the directors and the Chief Financial Officer of Centro for failing to discharge their duties with due care and diligence in relation to approving the financial reports for three property trusts - Centro Properties Ltd, Centro Property Trust and Centro Retail Trust - for the year ended 30 June 2007.

ASIC alleged that the financial reports contained material misstatements, in particular that approximately A$1.5 billion of interest-bearing liabilities were wrongly classified as non-current liabilities, rather than current liabilities.³
1. What difference does it make whether the $1.5 billion is disclosed as a current or noncurrent liability?
2. Do you believe it should be part of the directors' statutory obligations to ensure financial statements are not materially misstated?