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Deloitte comments on FASB’s proposal to simplify debt classification in a classified balance sheet

Published on: Oct 17, 2019

Deloitte & Touche LLP has commented on the FASB’s proposed ASU, Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent).

An excerpt from the comment letter is shown below:

We support the Board’s efforts to reduce unnecessary cost and complexity in the application of generally accepted accounting principles (GAAP). We believe that the revised proposed ASU would further these efforts by establishing a unified debt classification principle that is centered on a debt arrangement’s terms and conditions as of the balance sheet date. We expect that such a principle will be easier to apply than the existing patchwork of requirements for classifying debt arrangements as current or noncurrent and result in more consistent and meaningful information for financial statement users. Accordingly, we support finalization of the revised proposed ASU. As discussed in the appendixes to this letter, however, we recommend that the Board clarify and revise certain aspects of the proposal.

For more information, see the full text of the comment letter which is available below.

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