115 CFA
File: Financial Analysis - Reading 28 - 3. Derecognition of Debt

3. Derecognition of Debt

c. explain the derecognition of debt;

What is the appropriate accounting treatment of debt that is retired early (paid off early)?
Accounting rules dictate that the retired debt be removed from the books and the difference between the debt's net carrying value and the funds paid to retire the debt be recognized as a gain or loss.

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