They typically include information such as stated and effective interest rates, maturity dates, covenants, any collateral that is pledged, and the amount of scheduled debt repayments for the next five years.

What does an increase in long-term debt mean?

This increase in long-term debt on the balance sheet is primarily due to a slowdown in commodity (oil) prices and thereby resulting in reduced cash flows, straining their balance sheet.

What is a good long-term debt to asset ratio?

Although a ratio result that is considered indicative of a “healthy” company varies by industry, generally speaking, a ratio result of less than 0.5 is considered good.

What disclosures are required relative to long-term debt and sinking fund requirements?

What disclosures are required relative to long-term debt and sinking fund requirements? 21. The required disclosures at the balance sheet date are future payments for sinking fund requirements and the maturity amounts of long-term debt during each of the next five years.

Is a higher debt to asset ratio better?

In general, many investors look for a company to have a debt ratio between 0.3 and 0.6. From a pure risk perspective, debt ratios of 0.4 or lower are considered better, while a debt ratio of 0.6 or higher makes it more difficult to borrow money.

What is acceptable debt to equity ratio?

A good debt to equity ratio is around 1 to 1.5. However, the ideal debt to equity ratio will vary depending on the industry because some industries use more debt financing than others. Capital-intensive industries like the financial and manufacturing industries often have higher ratios that can be greater than 2.

What are the types of situations that result in troubled debt?

Two different types of situations result with troubled debt: (1) Impairments, and (2) Restructurings. Restructurings can be further classified into: (a) Settlements.

Are purchase obligations on balance sheet?

Purchase obligations; and. Other long-term liabilities reflected on the registrant’s balance sheet under GAAP.

What are the disclosure requirements for long-term liabilities in the notes to the financial statements?

Note disclosures for long-term debt (such as bonds, notes, and leases) and operating long-term liabilities (such as claims and judgments, compensated absences, and other accrued liabilities) should show the beginning balance of each major class of long-term liability, as well as additions to, deletions from, and the …