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Issuing Loan Notes – URGENT!!!

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Issuing Loan Notes – URGENT!!!

  • This topic has 2 replies, 3 voices, and was last updated 14 years ago by MikeLittle.
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  • October 21, 2011 at 8:48 pm #50180
    hann
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    If a company issues loan notes, do they treat them as an asset or liability?

    October 23, 2011 at 4:44 pm #88989
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23335
    • ☆☆☆☆☆

    I think the clue is in the word “issue”. If it were an asset, the question would be “where a company invests in loan notes …..”

    Where a company “issues” a loan note, they are doing so ( giving a written acknowledgement of a debt ) in recognition of the fact that they now owe money.

    Thus, it’s a liability

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