Frozen GAAP - Revision history

imported>Doug Williamson: Classify page.

2022-06-24T13:00:48Z

Classify page.

@@ Line 14: / Line 14: @@
 *[[Documentation]]
 *[[Financial covenant]]
-*[[GAAP]]
+* [[Generally accepted accounting principles]]  (GAAP)
 *[[IFRS 16]]

imported>Doug Williamson: Spacing.

2016-01-21T08:17:49Z

Spacing.

← Older revision		Revision as of 08:17, 21 January 2016
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	This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.		This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.


	==See also==		==See also==

imported>Doug Williamson: Qualify 'in general' to 'often'.

2016-01-21T08:17:35Z

Qualify 'in general' to 'often'.

← Older revision		Revision as of 08:17, 21 January 2016
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	~~In general loan~~ documentation is worded such that covenants are tested assuming GAAP at the date the loan was negotiated, as this gives both parties the greatest certainty.		Loan documentation is often worded such that covenants are tested assuming GAAP at the date the loan was negotiated, as this gives both parties the greatest certainty.

	This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.		This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.

imported>Doug Williamson: Link with IFRS 16 page.

2016-01-21T08:12:05Z

Link with IFRS 16 page.

← Older revision		Revision as of 08:12, 21 January 2016
Line 14:		Line 14:
	*[[Financial covenant]]		*[[Financial covenant]]
	*[[GAAP]]		*[[GAAP]]
			*[[IFRS 16]]

imported>Doug Williamson: Link related pages.

2016-01-17T15:33:57Z

Link related pages.

← Older revision		Revision as of 15:33, 17 January 2016
Line 9:		Line 9:

	This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.		This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.

			==See also==
			*[[Documentation]]
			*[[Financial covenant]]
			*[[GAAP]]

imported>Doug Williamson: Create the page. Source: ACT CFF Reading Oct 2015 diet, 4.3.1, section 6.9, p11.

2015-07-20T07:50:02Z

Create the page. Source: ACT CFF Reading Oct 2015 diet, 4.3.1, section 6.9, p11.

New page

''Loan documentation - financial covenants''.

The financial model used to set initial [[financial covenant]] levels will be based on the accounting principles in use by the borrower at the time of negotiation, usually referred to as generally accepted accounting principles ('[[GAAP]]').

However accounting standards change over time, and consequently financial covenant ratios can be affected.

In general loan documentation is worded such that covenants are tested assuming GAAP at the date the loan was negotiated, as this gives both parties the greatest certainty.

This is called 'frozen' GAAP, because the initially prevailing GAAP is frozen for the purposes of covenant testing.