U.S. GAAP Codification of Accounting Standards
 U.S. GAAP Codification Accounting Standards, ASC

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 U.S. GAAP Accounting Standards Codification Topic 835-30: Imputation of Interest

 Codification Topic 835-30 Imputation of Interest Interest on Receivables and Payables APB Opinion 21, August 1971 "Interest on Receivables and Payables" Note exchanged for cash 1. Present value of the note = cash proceeds exchanged 2. If present value of the note < face amount of the note  --> the difference is discount --> discount is amortized using "interest method" 3. Amortization of discount --> interest expense for note payable --> interest income for note receivable Example 1: Note payable Received \$1,000 in cash and issued a \$1,100 note payable Present value = \$1,000 Face amount = \$1,100 Discount on note payable = \$100 \$100 is recognized as interest expense over the period Example 2: Note receivable Paid \$1,800 in cash and received a \$2,000 note receivable Present value = \$1,800 Face amount = \$2,000 Discount on note receivable = \$200 \$200 is recognized as interest income over the period Note exchanged for noncash assets 1. Cost of the asset = (1) or (2) whichever is more clearly determinable (1) fair value of the asset (2) market value of the note 2. If cost of the asset < face amount of the note  --> the difference is discount --> discount is amortized using "interest method" 3. Amortization of discount --> interest expense for note payable --> interest income for note receivable Example 3: Note payable Purchased a property with \$3,000 fair value and issued a \$3,300 note payable Cost of the asset = \$3,000 Face amount = \$3,300 Discount on note payable = \$300 \$300 is recognized as interest expense over the period Example 4: Note receivable Sold a property with \$4,000 fair value and received a \$4,400 note receivable Fair value of the asset = \$4,000 Face amount = \$4,400 Discount on note receivable = \$400 \$400 is recognized as interest income over the period Balance Sheet Presentation 1. Discount is deducted from the face amount of the note --> Contra-asset account for note receivable --> Contra-liability account for note payable 2. Premium is added to the face amount of the note

 Codification Topic 835    Interest Subtopics of Codification Topic 835      835-10 Overall    835-20 Capitalization of interest    835-30 Imputation of interest Accounting Terms of Codification Topic 835-10 Accounting Terms of Codification Topic 835-20      Activities    Capitalization rate    Expenditures    Intended use    Interest cost Accounting Terms of Codification Topic 835-30      Discount    Imputed interest rate    Interest method    Premium

 Other Topics at the Codification 800 Accounting Standards Codification, ASC, Overview ASC Codification Topic 805: Business Combinations ASC Codification Topic 808: Collaborative Arrangements ASC Codification Topic 810: Consolidation ASC Codification Topic 815: Derivatives and Hedging ASC Codification Topic 820: Fair Value Measurements and Disclosures ASC Codification Topic 825: Financial Instruments ASC Codification Topic 830: Foreign Currency Matters ASC Codification Topic 835: Interest ASC Codification Topic 840: Leases ASC Codification Topic 845: Nonmonetary Transactions ASC Codification Topic 850: Related Party Disclosures ASC Codification Topic 852: Reorganizations ASC Codification Topic 855: Subsequent Events ASC Codification Topic 860: Transfers and Servicing

 U.S. GAAP Codification of Accounting Standards Accounting Standards Codification, ASC, Overview ASC Codification 200: Presentation ASC Codification 300: Assets ASC Codification 400: Liabilities ASC Codification 500: Equity ASC Codification 600: Revenue ASC Codification 700: Expenses ASC Codification 800: Broad Transactions ASC Codification 900: Industry

 U.S. GAAP by Topic Accounting Topics