How exaclty do you go about borrowing against a net operating loss(NOL)?
What are the ramifications of collatarizing a NOL that is to be carried forward for the next 3-4 yrs?
How exactly is this treated under US GAAP?
Thanks
You can’t. As far as I know, NOL our entity-specific and there are set rules from the IRS about how an acquiree can use existing NOLs of the target company, but otherwise, NOL’s are non-transferrable, thus they hold no value to a third-party lender. Under US GAAP, collateralized assets remain assets on the borrower’s balance sheet, however they may be classified as restricted.