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More Debt Would Be ‘Current’ Under New Accounting Proposal

Sept. 12, 2019, 6:29 PM

More companies would have to label their debt as due right away under a newly revised accounting proposal, a move some businesses fear could make them appear more indebted than they are.

The Financial Accounting Standards Board’s Sept. 12 proposal would erase reams of complex debt classification rules. It offers a single principle to determine whether a debt on a balance sheet should be classified as current or noncurrent.

Under FASB’s plan, debts due within 12 months of a business’s balance sheet date—the date it closes its books for the reporting period—would be classified as current, or due in the...

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