In April of 2015, FASB issued Accounting Standards Update No. 2015-03 Simplifying the Presentation of Debt Issuance Costs. The update requires the presentation of debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability (i.e., a contra liability).
The update is specific to the presentation of the debt issuance costs and does not affect the recognition and measurement of debt issuance costs. An entity should apply the new guidance on a retrospective basis wherein the balance sheet of each period presented should be adjusted to reflect the new guidance. The update was issued to reduce the complexity within GAAP.
For public business entities, the update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.
For all other entities, the update is effective for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.
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