When companies add back interest paid in cash, is there a difference between GAAP interest expense and interest paid in cash? If so could someone please explain what causes this difference between GAAP interest expense & interest paid in cash
| +270 | Why UBS Is the Worst Place to Start Your IB Career | 42 | 2h |
| +220 | UBS 2nd Year Analyst Q&A (2026) | 41 | 1d |
| +137 | UBS IB 26Q2 a Disaster! Advisory Revenue Down 23%, Capital MarketsDown 5% | 19 | 5h |
| +105 | What's your craziest "hardo" story? | 18 | 18h |
| +93 | Downfall of Qatalyst | 21 | 16m |
| +81 | Lincoln International Return Offers | 26 | 2h |
| +57 | Wolf of Wall Street vs. Reality: Anyone else feel scammed by the movies? | 19 | 1d |
| +55 | Elite Boutique interview questions | 17 | 2d |
| +43 | so confused about 28 SA timeline | 30 | 1d |
| +34 | Rate my non-target resume | 19 | 21h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I have $100 of Unsecured Notes that pay interest semi-annually at 10% in 2Q & 4Q
GAAP 1Q Interest Expense = $2.50 Cash Interest Expense = $0
GAAP accrues the expense on a straight-line basis throughout the year, whether or not it has actually been paid in cash, in this case $2.50/qtr. Obviously, the company only incurs a cash expense when they wire their interest payment to the lender.
Laboriosam doloremque harum quo suscipit consequatur. Dolorem excepturi et repellat sed sit sunt ut. Sed sint provident sequi facere aut omnis aut. Provident quos at odio blanditiis sunt ut. Laudantium repudiandae porro aut. Fuga et doloribus distinctio dolor saepe voluptas facere aliquam.
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...