Accounting Considerations for Senior Debt
Also known as a Senior Note, Senior Debt consists of a company’s outstanding loans collateralized by the business’ assets. As the name implies, Senior Debt holders are the first claimants…
Accounting for Net Charge Offs
When it comes it understanding a net charge-off (NCO), it’s the difference between any recovery of delinquent debt and gross charge-offs a business sees in a defined accounting time frame. NCOs are debts a company projects…
How to Account for Additional Paid-in-Capital (APIC)
According to the May 2019 Financial Stability Report from the Board of Governors of the Federal Reserve System, there was more than $15 billion in outstanding commercial credit. While there are many ways companies…
Financing Via Off-Balance Sheet Options
When it comes to business needs, securing financing is a top priority, particularly when starting out or for on-going needs such as making payroll or paying for inventory. This financing could include a loan…
A Look at the Nonaccrual Experience Method
When it comes to running a business, having outstanding invoices that turn into uncollectible receivables or simply bad debt is a fact of life. The Internal Revenue Service (IRS) has a safe harbor…
Capitalizing Versus Expensing Research and Development
Based on statistics from the World Bank, the United States government spent 3.59 percent of its 2022 gross domestic product on research and development. While private businesses spend on their own research…
How to Account for Debit Notes
With the global digital payments market expected to see north of $20 trillion in transaction value in 2025, according to Statista, business-to-business transactions are undoubtedly going to be seeing…
Dissecting Working Capital
Working capital is the difference between a business’ current assets and liabilities. Negative working capital can happen when a business’ current assets are below its current liabilities. Therefore, working…
Decoding Net Realizable Value (NRV)
Whether it’s maintaining compliance with accounting standards or ensuring asset values are not overvalued for internal stakeholders or external existing or potential new investors, looking at net realizable…
How to Account for Bad Debt Expense
Bad debt expense is an important concept that businesses must account for when it comes to their financial reporting. Regardless of the timeframe a company accounts for, it helps companies determine what…