Amortization of Financing Costs

Accrual based accounting requires financing costs to be amortized (allocated) over the expected life of the financial instrument or loan.

Amortization of Financing Costs

Amortization of Financing Costs

When a business acquires a loan there are typically closing costs involved.   Generally Accepted Accounting Principles (GAAP) require these financing costs to be amortized (allocated) over the life of the loan.  There are several principles the reader needs to understand to properly calculate and assign these costs to the financial statements.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register
Follow by Email
Facebook
Google+
https://businessecon.org/tag/amortization-of-financing-costs">
Twitter
LinkedIn