Trending Content
+28 | Getting Frustrated | 10 | 16h | |
+22 | What’s my next move? | 5 | 5d | |
+20 | Vanderbilt vs. Notre Dame M.S. in Finance Equity Research placement | 10 | 6d | |
+18 | Biotech ER vs IB | 16 | 20h | |
+18 | CS Major looking to switch and break into high finance - is it over for me? | 6 | 1w | |
+15 | Wolfe Research best coverage verticals 2024? | 13 | 6d | |
+15 | Final Round Never Heard Back? | 4 | 1w | |
+12 | The Ultimate Non-ER SS Research Guide | 1 | 2w | |
+12 | Why is MM ER comp so bad? | 6 | 3d | |
+12 | Manager fired, debating to exit | 5 | 2w |
Career Resources
They're expenses
How do you categorize them in terms of invested capital (analytical balance sheet)? I would, for instance, argue that accrued interest expenses should be categorized as IBD because of their certainty, and treated the same as if they were interest payable
Interest payable is an accrued expense - this is a circular argument. If a note requires quarterly interest payments, each month will have an entry that debits interest expense and credits interest payable, recognizing the portion of the interest that accrued during the period. A loan isn't going to have interest that compounds at a rate faster than it is repaid - that is the definition of insolvency, so accrued interest isn't considered "interest bearing debt". I don't want to get into APR and EAR, but interest expense and the related liability are calculated using EAR regardless of what APR is, so compounding is still accounted for.
Accrued rent and operating leases, again, are liabilities created to recognize the portion of the expense incurred during the period. If a company is making late payments and there are fees associated, those are expenses as well - but it doesn't mean you treat the accrued portion as interest bearing debt. If the company is unable to meet these obligations and they finance the payments, THAT would be IBD.
Not sure what invested capital has to do with any of this. Accrued expenses are liabilities, so they balance against assets. A trial balance (assuming this is what you are referring to as "analytical balance sheet" - never heard of that) includes expenses (debit normal balance) which will balance against the related liability for the period (credit normal balance). Invested capital balances against stockholders equity, as well as any assets that were purchased using that capital.
Praesentium voluptatem accusamus facere. Autem reiciendis doloremque magni repellat nihil ex. Et et accusamus fugit est et minima dignissimos. Repellendus rem veritatis omnis reprehenderit labore maxime quo.
Optio porro totam reiciendis totam dolores. Dolore porro quia praesentium mollitia. Sit fugit aspernatur autem omnis molestias commodi. Voluptatem est eos quia soluta adipisci vel officiis.
Qui magni aperiam quaerat temporibus ex deleniti eum. Sint id quo error laboriosam. A maxime dolor at enim nam.
Enim voluptas velit illum officia aut blanditiis cum. Et itaque quis voluptatem quae. Eos enim quia est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...