Tuesday, January 8, 2019
A Look at Climate Change Disclosures

Wednesday, January 2, 2019
Quants: Point-in-Time Data for Backtesting

Friday, December 28, 2018
Now Showing: Controls & Procedures

Thursday, December 27, 2018
A Reminder on Non-GAAP Reporting Rules

Monday, December 17, 2018
Researching PG&E’s Wildfire Risk

Wednesday, December 12, 2018
Tracking Brexit Disclosures

Thursday, December 6, 2018
Campbell Soup: Looking Behind the Label

Sunday, December 2, 2018
SEC Comment Letters: The Amazon Example

Wednesday, November 28, 2018
Measuring Big Pharma’s Chemical Dependency

Monday, November 26, 2018
Analysts, Can You Relate? A True Story

Monday, November 19, 2018
Digging Up Historical Trend Data: Quest Example

Sunday, November 11, 2018
Cost of Revenue, SG&A: Q3 Update

Monday, November 5, 2018
Lease Accounting: FedEx vs. UPS

Saturday, November 3, 2018
New Email Alerting Powers

Wednesday, October 31, 2018
PTC and Two Tales of Revenue

Tuesday, October 30, 2018
10-K/Q Section Text Change Detection

Sunday, October 28, 2018
Finding Purchase Price Allocation

Sunday, October 21, 2018
Charting Netflix Growth in Three Ways

Wednesday, October 17, 2018
Interesting Data on Interest Income

Thursday, October 11, 2018
The Decline of Sears in Three Charts

Archive  |  Search:

Attention, all aficionados of corporate debt! The Financial Accounting Standards Board has floated a proposal to simplify how debt is classified on the balance sheet, which could ultimately change the amounts companies report as current or non-current.

The proposal, published earlier this week, would replace the fact-specific test that FASB offers now with simpler, principles-based guidance. That should ease the task of deciding where to report debt, either as current or non-current. The proposal would amend Accounting Standard 470, Debt.

The goal with the amendments is to focus debt classification on what the borrower’s rights and obligations are, as of the date a financial statement is filed. So for example, if a violation of a debt covenant has been waived, the borrowing company could continue to list that debt as non-current if the waiver is issued before the financial statements are filed.

The proposals are out for public comment until May, and then FASB will review the feedback and deliberate more; even if everyone loves the idea, no change will go into effect any time soon. The debt proposals are part of FASB’s long-term effort to simplify the rules around financial disclosure.

Assuming the rules do get adopted, they could lead companies to shift around some debt between current and non-current lines. FASB gave two examples:

  • Short-term debt that is refinanced on a long-term basis after the balance sheet date would no longer be classified as a noncurrent liability.
  • Companies with debt that contains subjective acceleration clauses would no longer be required to assess the likelihood of acceleration of the due date when determining whether the debt is a noncurrent or current liability.

None of this will affect Calcbench subscribers directly; we will always be able to capture current and non-current debt levels as companies report them. But financial analysts could see those debt levels shift around in the future, and this is why. We just wanted to pass along the news as a public service to anyone who might want to review the proposals and comment on them.

FREE Calcbench Premium
Two Week Trial

Research Financial & Accounting Data Like Never Before. More features and try our Excel add-in. Sign up now to try the Premium Suite.