Revised: Balance sheet debt classification
On September 12, 2019, FASB revised its balance sheet debt classification in a Proposed Accounting Standards Update, which adopted an “overarching, cohesive principle” to improve guidance on whether debt should be classified as a current or noncurrent liability.
The initial proposal issued on January 10, 2017, depended on “fact-specific guidance,” but the revision replacement simplified the classification by providing “more consistent and transparent information to financial statement users.”
Since its update, FASB Chairman Russell Golden has sought public comment only questions of changes relating to unused long-term financing agreements, grace periods, and debt arrangements settled entirely in equity.