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FASB Proposes Fixes for Debt Costs, Defined-Benefit Plans

Tammy Whitehouse | October 17, 2014

The Financial Accounting Standards Board is proposing changes to accounting standards that are meant to simplify things around debt issuance costs and defined benefit plan measurement dates.

With respect to debt issuance costs, FASB is hoping to remove a source of confusion for users of financial statements over different presentation requirementsfor debt issuance costs compared with debt discounts or premiums. Current  rules tell companies they should capitalize any costs paid to third parties that are directly related to issuing debt, like legal fees or printing costs, and present them as deferred charges in the asset area of the balance sheet. That’s different treatment than companies are required to give to discounts or premiums resulting from the difference between the net proceeds of the debt issuance and the amount payable at maturity; those are taken as a...

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