I am 99% sure they shouldn't but people keep doing it and its grinding my gears. Even after the updated accounting standards allow for new treatment of intangibles such as fees, people are still packaging them up as part of a fixed assets value.
No matter how much I think I am right, I realize that multiple CPA's and internal accountants can't be wrong and I am most certainly confused...? OK. I didn't realize anything, but I do acknowledge the possibility that I am an idiot and I am wrong.
Bump, homie.
Nobody's responded so I'm gonna take a crack, and hope I get corrected by someone smarter.
By fees, I assume you're talking about management fees and such that are siphoned from PE-owned companies. These fees are fixed because they come before interest, which is also calculated into multiples like FCCR. Because they come before interest, they have to be included in fixed assets because fees are considered higher priority than interest.
Please feel free to tell me how stupid I am, just pretending like this is a PE tech.
I was referring to loan fees - I should have specified. I was under the impression that they are amortized.
If possible, could you elaborate on the scenario your discussing. I've never dealt with any of that stuff.
Fees paid from cash flow such as management fees would not be a balance sheet item unless they were funded into an escrow / restricted cash account. Loan fees are amortized over the loan and are assets on the balance sheet.
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