Long Term Debt (include current portion?)

Hello, to determine total long term debt would an anlalyst include the current portion? I realize that the B/S only lists the long term debt portion in long term liabilities but if one was to ask “what the total amount of LTD” then wouldnt the correct answer be to include the current portion found in current assets (CPLTD)? I think that a company’s 10K removes current portion in the LTD notes section. I believe the total amount of LTD is LTD + current portion, however someone else at the company I work for said dont include this current portion. I thought that the current portion, while it is short term, is still long term debt but only due in the current period. One other note, LTD + current is used in debt to capital calculation. thank you

oops:

i include it all when doing ratios that have debt in the denominator. But that is only b/c when I got my superior’s model, I saw he did it that way and since he is CPA, CFA, I assumed he is right : ) -

daj224 Wrote: ------------------------------------------------------- > i include it all when doing ratios that have debt > in the denominator. But that is only b/c when I > got my superior’s model, I saw he did it that way > and since he is CPA, CFA, I assumed he is right : > ) - That is the correct accounting treatment of it. To the extent that it falls due in 12 months it is considered current, otherwise it makes leverage ratios better than they should be.

pdvsa Wrote: ------------------------------------------------------- > Hello, to determine total long term debt would an > anlalyst include the current portion? I realize > that the B/S only lists the long term debt portion > in long term liabilities but if one was to ask > “what the total amount of LTD” then wouldnt the > correct answer be to include the current portion > found in current assets (CPLTD)? I think that a > company’s 10K removes current portion in the LTD > notes section. > > I believe the total amount of LTD is LTD + current > portion, however someone else at the company I > work for said dont include this current portion. > I thought that the current portion, while it is > short term, is still long term debt but only due > in the current period. One other note, LTD + > current is used in debt to capital calculation. > > thank you i include it all

> That is the correct accounting treatment of it. To > the extent that it falls due in 12 months it is > considered current, otherwise it makes leverage > ratios better than they should be. How can this be the correct accounting treatment? Long-term debt is by definition all debt not due within the next 12 months. The current portion of ST-debt is just that. It is no longer LT-debt. So to include it, would be to overstate LT-debt…

memalos Wrote: ------------------------------------------------------- > > That is the correct accounting treatment of it. > To > > the extent that it falls due in 12 months it is > > considered current, otherwise it makes leverage > > ratios better than they should be. > > > How can this be the correct accounting treatment? > > Long-term debt is by definition all debt not due > within the next 12 months. The current portion of > ST-debt is just that. It is no longer LT-debt. So > to include it, would be to overstate LT-debt… Memalos - The balance sheet current liabilities section has two items with respect to financing: 1.Short-term debt(This is made to be repaid within one year) 2. The current portion of LT debt - which is the portion of the long term debt that is payable within one year. Some portion of the long term is usually retired in the current period.

Joe2010: <1.Short-term debt(This is made to be repaid within one year) <2. The current portion of LT debt - which is the portion of the long term debt that is >payable within one year. Some portion of the long term is usually retired in the current >period. ==>Are you saying that you agree with what Memalos is saying? Memalos says that LTD is debt due over one year. In a Co’s 10K, LTD is only debt that is due after one year but I would say that the total debt (if hv no other debt) would be LTD + current portion.

I always include current portion when calculating ratios, it’s more convervative

Dapper, what if you are simply stating the LTD level and not using it in a ratio? Would you still include CPLTD?

pdvsa Wrote: ------------------------------------------------------- > Dapper, what if you are simply stating the LTD > level and not using it in a ratio? Would you > still include CPLTD? PDVSA, State long-term vs st breakout as it’s relevant. Forecasting four qtrs of cash flows? Calculating EV ?

I guess everybody is tired after such a stinker of a year we all had… The original question was: Do we include the CPLTD in our calculations of LTD or not? Obviously to figure out the total amount of gross debt one includes all debt (+PV of lease obligations if u wanna be pendantic)… My take is that the CPLTD should not be included because it is no longer LT, as is is payable within the yr… Anyone with a concrete explanation?