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US GAAP and IFRS accounting and reporting issues for shipping companies ? Reminders and Updates

13 January 2014

Training Agenda

1. Accounting for long term debt 2. Capitalization of interest cost 3. Restricted cash classification 4. Accounting changes

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Accounting for LongTerm Debt

ASC 470 "Debt" IAS 39 "Financial Instruments"

Presentation of Long-Term Debt

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Classification of debt

Current Liability Definition:

? The term "current liabilities" is used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities.

? In the shipping industry, "current" is defined as a one-year period after the balance sheet date.

In the case of debt: Classification is generally based on the repayment terms of the debt.

Obligations that, by their terms, are due on demand or will be due on demand within one year must be classified within current liabilities, even though liquidation may not be expected within that period.

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