When a loan covenant in a long term obligation is violated, what is the primary difference between US GAAP and IFRS when determining whether the loan will retain its long term classification A) To retain its long term classification, US GAAP requires the waiver to be received before year end, while IFRS requires the waiver to be received before the financial statements are issued B) There is no difference because both require the company to receive a waiver from the bank before the financial statements are issued for the loan to retain its long term classification C) To retain its long term classification, US GAAP requires the waiver to be received before the financial statements are issued, while IFRS requires the waiver to be received before year end D) There is no difference because both require the company to receive a waiver from the bank before year end for the loan to retain its long term classification

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Posted on Oct 01, 2024

When a loan covenant in a long-term obligation is violated, what is the primary difference between US GAAP and IFRS when determining whether the loan

When a loan covenant in a long-term obligation is violated, what is the primary difference between US GAAP and IFRS when determining whether the loan will retain its long-term classification?


A)	To retain its long-term classification, US GAAP requires the waiver to be received before year-end, while IFRS requires the waiver to be received before the financial statements are issued.

B)	There is no difference because both require the company to receive a waiver from the bank before the financial statements are issued for the loan to retain its long-term classification.

C)	To retain its long-term classification, US GAAP requires the waiver to be received before the financial statements are issued, while IFRS requires the waiver to be received before year-end.

D)	There is no difference because both require the company to receive a waiver from the bank before year end for the loan to retain its long-term classification.