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12.10 Other debt — balance sheet classification
Publication date: 31 May 2022
us Financial statement presentation guide
Certain other situations may affect the balance sheet classification of debt. These are discussed in the following subsections.
12.10.1 Subsidiary’s debt when fiscal year differs from parent
SEC registrants may need specific disclosures when a subsidiary with debt outstanding has a fiscal year that differs from its parent. For example, a subsidiary may have a material loan outstanding that is due beyond one year from its fiscal year-end. However, the maturity date of the loan payable may fall within the 12 months following the parent's fiscal year-end. In ASC 470-10-S99-4, the SEC staff noted that it would expect to see the debt classified as current in the parent's consolidated financial statements in this fact pattern.
12.10.2 Debt restructuring
Debt modifications (including troubled debt restructurings) may change the terms of the debt—for example, the amount due within one year after the date of the borrower's balance sheet may change. These modifications may result in reclassification of all or a portion of the carrying amount of the debt at the time of restructuring.
12.10.3 Structured payables
Reporting entities that enter into structured payable programs need to consider whether the transaction terms could cause the substance of the liability to change from trade payables to debt. For considerations related to structured payables, see FSP 11.3.1.5.
Note about ongoing standard setting
In December 2021, the FASB issued an exposure draft that proposes required disclosures for supplier finance programs. As of the publication date of this guide, the proposed amendments have not yet been issued. Reporting entities should continue to monitor the status of these proposed amendments and, if finalized, the implications on disclosure.
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