Codification #1

1. Access the glossary (Master Glossary) to answer the following.

a. What does the term “callable obligation” mean?

470-10-20

An obligation is callable at a given date if the creditor has the right at that date to demand, or to give notice of its intention to demand, repayment of the obligation owed to it by the debtor.

A callable obligation is any liability that the creditor has the right to demand from the debtor its payment at a specific time.

b. What is an imputed interest rate?

835-30-20

The interest rate that results from a process of approximation (or imputation) required when the present value of a note must be estimated because an established exchange price is not determinable and the note has no ready market.

The imputed interest rate is an approximation of interest, used to reach the present value of a note payable which does not have a price that can be determined by any method at the time of issue.

c. What is a long-term obligation?

470-10-20

Long-term obligations are those scheduled to mature beyond one year (or the operating cycle, if applicable) from the date of an entity's balance sheet.

Long term obligations are liabilities on a balance sheet which will be due beyond one year or operating cycle (whichever is greater).

d. What is the definition of “effective interest rate”?

310-10-20

The rate of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or acquisition of the loan.

Effective interest rate is the stated rate in the contract adjusted for front-end fees, premium or discounts.

2. What guidance does the Codification provide on the disclosure of long-term obligations?Currently Viewing:

470-10-50-1

The combined aggregate amount of maturities and sinking fund requirements for all long-term borrowings shall be disclosed for each of the five years following the date of the latest balance...