easy · Private Equity & LBOs

Under standard GAAP accounting, how is OID treated on the income statement over the life of the debt?

1. It is recorded as an extraordinary loss on the cash flow statement.
2. It is amortized as non-cash interest expense.
3. It is recorded as a one-time transaction expense at the time of closing.
4. It is deducted directly from EBITDA as an operating expense.

Sign up free to see the explanation and track your rank →