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Necessary parts of a loan agreement

Forming loan agreements is something you normally are involved with when you’re giving out loans. Rarely it’s something someone getting a loan needs to do because it’s the risks of the loan giver that need to be covered. Whilst it’s a communication and agreement between parties, there’s still one party that’s in a driver’s seat […]

The accounting entries when it comes to compensations received

As we already mentioned in our previous post, on occasions when some of your expenses are being compensated, there’s one key question you must ask. Do you know it for certain? The most important element when it comes to recognizing anything on your financial statements is the level of certainty – is it below or […]

You’re being compensated for your expenses

There are numerous businesses, where some of their expenses are being compensated by another party (i.e. party they are made for or who gets something out of it). Simply put you make an expense and this very same expense is later on either in full or partly being paid up by this someone else. You […]

How to deal with loan covenants?

In case you have loan contracts which include some sort of covenants, there are a few things you want to keep in mind. Since often times the loan liabilities are considerable, proper dealings are a “must”. First and foremost you have to agree with the bank on how various covenants are measured, what is and […]

Loan covenants may end up classifying your loan as short term liability

When taking a loan from a bank, the contract may or may not include special conditions named as covenants. Usually, when the loan taken is in a small amount and with minimal risks, the banks do not see the need to add any special covenants to conditions of the agreement. However, the bigger the amounts […]