When a Company Has Debt Coming Due and Wants to Refinance

question 120

Multiple Choice

When a company has debt coming due and wants to refinance and classify the debt as a long-term liability rather than paying for it currently with cash:

• A)U.S.GAAP requires the debt be refinanced by the balance sheet date and IFRS requires that the company have intent to refinance on a long-term basis.
• B)U.S.GAAP requires that the company have intent to refinance the debt on a long-term basis and IFRS requires the debt be refinanced by the balance sheet date.
• C)U.S.GAAP requires that the company have intent and ability to refinance the debt on a long-term basis and IFRS requires the debt be refinanced by the balance sheet date.
• D)U.S.GAAP requires the debt be refinanced within 60 days of the balance sheet date and IFRS requires the debt be refinanced by within 30 days of the balance sheet date.

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Definitions:

Digital Technology

The branch of technology that involves the use of digital devices and systems to generate, process, or store data.

Customer Relationships

These are the ongoing relationships a company maintains with its customers with the goal of fostering loyalty and long-term engagement.

Unique Capabilities

Distinctive skills, technologies, or resources that give a company a competitive advantage over others.

Form Utility

The value added to goods through a change in their form or shape.