Question

Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific eight- or nine-digit Codification citation (XXX-XX-XX-XX) for accounting for each of the following items:

Required:
1. Disclosure requirements for maturities of long-term debt.
2. How to estimate the value of a note when a note having no ready market and no interest rate is exchanged for a noncash asset without a readily available fair value.
3. When the straight-line method can be used as an alternative to the interest method of determining interest.

Answer 1

Ans: The specific eight- or nine-digit Codification citation for accounting for every of the subsequent items are:

1. The accounting disclosure requirements for maturities of long – term debt code citation is FASB ASC 470-10-50-1: “Debt-overall-Disclosure-Disclosure of Long Term Obligations”.

2. FASB ASC 835-30-25-11: “Interest –Imputation of Interest. Within the absence of generally accepted exchange prices for the related property, goods, or service or evidence of the fair value of the note (as described in paragraph 835-30-25-2), the present value of a note that demand either no interest or a rate of interest that's clearly unreasonable shall be determined by discounting all future payments on the notes using an imputed rate of interest. This determination shall be made at the time when the note is issued, assumed, or acquired; any subsequent changes in prevailing interest rates shall be ignored."

3. FASB ASC 835-30-45-3 : "Amortization of discount or premium shall be reported as interest expense within the case of liabilities or as interest income in the case of assets. Amortization of debt issuance costs also shall be reported as expense."