Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

ASU 15-03 – Debt issue costs will be moving to the other side of the balance sheet

leave a comment »

Debt issue costs will soon need to be classified as a reduction in long-term debt instead of a deferred charge on the asset side of the balance sheet.

This change will be required by FASB’s ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

In one sentence, this change is needed because debt issue costs are essentially an adjustment of interest yield and therefore should be presented along with the liability that generated the issue costs.

Effective date and transition

From the ASU:

For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.

For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.

Short translation: it is required for 12/31/16 year-end financials for public and private companies along with NPOs.

Early implementation is allowed.

The change will be applied retrospectively – any prior years presented in the financial statements will need to be restated.

Other discussions

See also:

Written by Jim Ulvog

April 9, 2015, 12:39 pm at 12:39 pm

Posted in Accounting

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: