While i was doing past paper (2011-afternoon) i came across this question when they gave the answer to net borrowing as increase in LT debt - increase in notes payable. According to the CFA 2013 curriculum vol 4 pg 212, net borrowing should be increase in LT debt + increase in notes payable. Whats the issue here? Can anyone pls explain? Thanks
go with 2013, net borrowing is basically anything you issue - anything you pay back, so its the net of how much you’ve borrowed. LT debt + increase in notes payable - debt repayment is what I would think of it. I think they want you to inclue but ST and LT debt so you don’t miss items on the balance sheet.
the 2013 Curriculum only stated increase in LT debt + increase in notes payable, it doesn’t net off anything. pg 212 vol 4
I think this came up last year and it was an error.
Sounds like a typo.
This one makes sense.
Thanks all… So the 2011 was a typo?
Stick with changes in LT debt + changes in notes payable.
I cannot imagine it being anything but. As written it makes no sense.