Short Term Debt Expected to Be Refinanced

Short Term Debt Expected to Be Refinanced

Accounting assignment: In the past, short-term obligations that were expected to be refinanced on a long-term basis 
were not included in current liabilities. Today, two criteria must be met for this type of obligation to be excluded from current liabilities:

(1) there must be an honest intent to refinance the obligation so that it will not result in a claim against current assets, and

(2) the ability to refinance the obligation must be demonstrated through either:
     (i) actual refinancing of the obligation after the balance sheet date, or
     (ii) entering into a financing agreement that clearly permits the refinancing on a long-term basis on terms that are readily determinable. 

For example, imagine a business with short-term liabilities totally $150,000 between several credit cards, trade accounts payable, and bank overdraft. In order to settle these liabilities, after the balance sheet date the business is able to take out a loan for $125,000. The business will be allowed to recognize $125,000 of the $150,000 liability as a long-term liability. However, since it cannot recognize as a long-term liability more than it has proven it can refinance, it will still have to recognize $25,000 as a current liability. 

Similarly, if the current liability is paid off after the balance sheet date with current assets, is must be recognized on the balance sheet as a current liability. For example, imagine the business above collects several accounts receivable in January worth $30,000. This is deposited in the bank eliminating the business’s overdraft. The $30,000 must be recognized as a current liability on the balance sheet date. That is, even if the business gets the same $125,000 loan, it will have to recognize $30,000 not $25,000 as a current liability. 

Quality Assignments Help Website

Cost of your order

Pages
{{total || ""}}

Why Choose Us

Top Quality and Well-Researched Papers

We ensure that all your instructions are followed to the letter. You are able to choose the level of interest; professional, college, or high school. We will assign a writer who will cover all your specifications.

Professional and Experienced Academic Writers

We have a team of well trained and experiences assignment writers who are PhD and master’s holders. Our writers are can handle more than 91 disciplines.

Free Unlimited Revisions

If your assignment is not covered to your expectation, you can send your order for revision. The order should be submitted before 10 days elapses for review You can contact our support team or login to your personal account to submit your request.

100% Money-Back-Guarantee

We ensure on-time delivery of your papers. For clarification purpose, we may contact you regarding deadline extension. In case you cannot provide us with more time, we guarantee a 100% refund.

Originality & Confidentiality

We use professional tools to ensure all assignment help documents you receive are free of plagiarism. Our editors ensure optimum review of all quotations in the text. We also ensure confidentiality in our service delivery.

24/7 Customer Support

Our team of experts is available 24/7 to ensure that you are provided with the top customer experience. Any time you need assignment help, you can reach us and get the best experience with ours services.

Our Services

You don’t have to struggle with your papers. You need ample sleep; our writers will cover you. We provide writing services in all disciplines.

Essays

Essay Writing Services

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission and Business Papers

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Editing

Editing and Proofreading

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Coursework

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.