Industry Insights

FASB Standard Simplifies Presentation of Debt Issuance Costs

April 2015

On April 7, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2015-03 (ASU), Interest – Imputation of Interest (Subtopic 835-30):  Simplifying the Presentation of Debt Issuance Costs. Debt issuance costs are those associated with issuing loans and bonds, such as fees and commissions paid to investment banks, law firms, auditors and regulators. Current U.S. generally accepted accounting principles (GAAP) require different presentation for debt discounts or premiums and debt issuance costs. Debt issuance costs are presented as a deferred asset, while any discounts or premiums are netted with the debt liability. This creates a conflict with Concepts Statement 6, Elements of Financial Statements, which defines an asset as having “future economic benefit.”


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