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Unformatted text preview: Module 3, Group 2 6 th Feb. ‘11 Research Case 13-1 I would classify the commercial paper as a short-term current debt because the debt is to be repaid in a year. The commercial paper was used to finance a project and to be paid in full by year end. When the company decided to refinanced it, I would them have classified it as a long- term current with the disclosures in the financial statements. However, the FASB states, that it should be classified as a non-current long-term. (S99-3). The FASB goes further in explanation, if the commercial paper was labeled or with a option to “refinance or roll over” then it is the “long-term non-current liability”. Now it was paid off before it was refinanced with the “ long- term security” or part of the commercial paper was paid off by the year end. The company then refinanced the rest. The FASB states, that if the “refinance or roll over” option not employed then it would be a short-term if due in the next 12 months. In addition, the other criteria for it to then it would be a short-term if due in the next 12 months....
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This note was uploaded on 07/19/2011 for the course ACCT 302 taught by Professor S during the Spring '11 term at Lee.
- Spring '11