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Bulletin HASKINS & SELLS 67 Classification of Serial Maturities DE B A T A B L E questions are sometimes said to provide some of the spice of technical procedure in accountancy. As one looks over the list of such questions there are many which appear to be possible of settlement through the application of refined classification. In fact, most of the questions of classification probably may be settled by sufficient consideration of the variable factors which affect the problems and corresponding refinement in providing for the conditions to which variation gives rise. One of the outstanding questions of classification involves serial maturities of funded or long term debts. The present somewhat marked tendency of so arranging bond and note issues that the maturities will be spread over a period of years, furnishes the occasion for considerable attention from time to time to this matter. The question at issue is when, if ever, maturing installments should be included among the current liabilities. This is a matter which obviously has considerable bearing on the current ratio, and may distinctly affect the current position of a company depending on whether this installment about to mature is or is not included as a current liability. The classification prescribed by the Interstate Commerce Commission, which has served as a substantial basis for much of the legislation affecting accounting, deals with funded debt maturing, as follows: "There shall be included in this account the total par value of unmatured debt maturing more than two years from date of issue, issued by the accounting company and not retired or cancelled. * * * " This provision is so interpreted and applied that debts maturing one day after a balance sheet date are held to mature as of the balance sheet date, while maturities falling on the second day following a balance sheet date are considered to have fallen without the period closed by the date at which the balance sheet is prepared. In other words, in a case where the balance sheet is of December 31, and the question is one of deciding, under the provisions of this section, whether or not a maturity debt should be classified as unmatured or matured, if the date of maturity falls on January 1, the obligation is regarded as having matured December 31. If the date falls on January 2, the debt, for
Object Description
Title |
Classification of serial maturities |
Author |
Anonymous |
Subject |
Debt -- Accounting |
Citation |
Haskins & Sells Bulletin, Vol. 06, no. 09 (1923 September), p. 67-69 |
Date-Issued | 1923 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 6-p67 |