O'Reilly logo

Wiley Not-for-Profit GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles by Marie DiTommaso, Richard F. Larkin

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

26 LONG-TERM LIABILITIES

Perspective and Issues

Concepts, Rules, and Examples

Notes and Bonds

Notes issued solely for cash

Noncash transactions

Extinguishment of Debt

Gain or loss

Troubled Debt Restructurings

Debtors

Creditors

FASB ASC 310-10 creditors

Accounting for Costs Associated with Exit or Disposal Activities

Scope

Liability Recognition

One-Time Termination Benefits

Contract Termination Costs

Statement of Activities Presentation

Disclosures

Environmental Remediation Liability

PERSPECTIVE AND ISSUES

Long-term debt represents future sacrifices of economic benefits to be repaid over a period of more than one year or, if longer, the operating cycle. Long-term debt includes bonds payable, notes payable, lease obligations and pension and deferred compensation plan obligations. The accounting for bonds and long-term notes is covered in this chapter. See Chapter 6 for a discussion on when a not-for-profit organization that has debt outstanding may be considered a public entity for purposes of other financial statement disclosures.

The proper valuation of long-term debt is the present value of future payments using the market rate of interest, either stated or implied in the transaction, at the date the debt was incurred. An exception to the use of the market rate of interest stated or implied in the transaction in valuing long-term notes occurs when it is necessary to use an imputed interest rate (FASB ASC 835-30).

FASB ASC 420-10, discussed in greater detail later in this chapter, ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required