Accounting for Debt – The Devil Is in the Details

General Business

November 01, 2016
by Michael Webber, CPA

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Michael Webber Michael Webber, CPA
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Businesses take out debt obligations, including loans payable and bonds payable, for many reasons. It may be to purchase real estate, equipment, or inventory; expand operations; or increase working capital. Before debt obligations are obtained, it is important to understand the financial reporting implications.

This article explores some of the common accounting topics related to debt financing:  how to initially measure debt, accounting for debt issuance costs, debt covenants, presenting debt as either current or noncurrent, and other details that may be present in debt agreements.

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Length: 2 pages (PDF 86 kB)

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