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The FASB has issued Accounting Standard Update (“ASU”) 2015-03 “Interest- Imputation of Interest." The ASU simplifies the presentation of debt issuance costs by requiring debt issuance costs to be a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. Debt issuance costs will no longer be reported as an asset on the financial statements. The expense associated with debt issuance costs should be recorded as interest expense.
For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.
For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.
An entity should apply the new guidance on a retrospective basis, therefore, the balance sheet of each individual period presented should be adjusted to reflect the effects of applying the new guidance. An entity should disclose the nature and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items.