Organizations that hold debt arrangements or instruments must disclose several key items about the debt outstanding so financial statement users can clearly understand what the organization owes and is obligated to repay. These areas include short-term and long-term...
Debt Management Articles
Materiality, Material Misstatements, and Deficiencies in Accounting Explained
1. What is materiality in accounting? 2. What does “immaterial” mean in accounting? 3. What is a material misstatement? 4. Types of deficiencies Control deficiencies Significant deficiencies Material weaknesses 5. Materiality in practice: Applying capitalization...
Understanding Debt Modification vs. Extinguishment and the 10% Test in Accounting under US GAAP
1. Why does it matter how the amendment is treated? 2. What is a debt modification? 3. What is a debt extinguishment? 4. What is the 10% test? Example: The 10% test 5. How does the 10% test work? Example 1: Debt modification (
Accrued Interest on Debt Explained: Summary, Example, Journal Entries, & More
1. Accrued interest liability vs. expense Accrued interest expense Accrued interest liability (interest payable) 2. Application and measurement mechanics Day-count conventions Financial statement presentation 3. Example: Accrued interest on debt Loan origination...
Interest Expense Calculation Explained with Examples and Journal Entries
1. What is interest? 2. What is accrued interest? 3. Example of interest expense for a loan Interest expense calculation with journal entries 4. Interest expense on finance leases Which reporting frameworks does this apply to? How is finance lease interest expense...
Bonds Payable: Understanding the Basics of Accounting for Bonds
1. What are bonds payable? Interest in bonds Discount vs. premium Issuance costs 2. Bonds payable accounting Amortization of the discount or premium 3. Summary 4. Frequently asked questions 5. Related articlesWhen an organization requires additional funds, a common...
Debt Accounting under ASC 470 and GASB 34: Overview, Loans/Notes Payable, and Bonds Payable
1. Introduction to debt accounting 2. Financial statement recognition Initial measurement and recognition Short-term vs. long-term classification Subsequent measurement and amortization 3. Types of debt Secured vs. unsecured debt Notes payable and loans payable Bonds...