Current-noncurrent classification of debt; Sprint Corporation
Response to the following :
Consider the information presented in problem 1 .
Required:
1. How would Sprint report the debt in its balance sheet if it reported under IFRS? Why?
2. Would your answer to requirement 1 change if Sprint obtained its long-term credit facility after the balance sheet date? Why?
Problem 1:
Current- noncurrent classification of debt; Sprint Corporation
An annual report of Sprint Corporation contained a rather lengthy narrative entitled "Review of Segmental Results of Operation." The narrative noted that short-term notes payable and commercial paper outstanding at the end of the year aggregated $756 million and that during the following year "This entire balance will be replaced by the issuance of long-term debt or will continue to be refinanced under existing long-term credit facilities."
Required:
How did Sprint report the debt in its balance sheet? Why?