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dc.contributor.authorMulford, Charles W.
dc.contributor.authorComiskey, Eugene E.
dc.date.accessioned2008-01-18T16:19:57Z
dc.date.available2008-01-18T16:19:57Z
dc.date.issued2007-08
dc.identifier.urihttp://hdl.handle.net/1853/19230
dc.description.abstractIn this research report we discuss (1) why firms swap interest payments, (2) the essentials of swap accounting, (3) the reasons for swap terminations, (4) swap-termination accounting, and (5) the classification of cash receipts and payments from swap terminations. The study also includes company input on cash flow classification decisions and recommendations for GAAP changes. There is significant diversity in the cash flow classification of payments and receipts arising from the termination of interest rate swaps. We find evidence that both an operating and a financing designation are often used. Differences in the nature of the underlying transactions or in the circumstances surrounding them do not explain the diversity in reporting practices noted. Given that interest rate swaps are motivated primarily by the desire to manage interest rate risk, we think that an operating designation is the more appropriate classification. We identify a sample of firms that employ a financing designation for swap termination payments and receipts and adjust reported operating cash flow to include them. Significant changes to operating cash flow are noted in several cases.en_US
dc.language.isoen_USen_US
dc.publisherGeorgia Institute of Technologyen_US
dc.subjectAccountingen_US
dc.subjectSwap accountingen_US
dc.subjectCash flow classificationen_US
dc.titleThe Cash Flow Classification of Payments and Receipts Associated with the Termination of Interest Rate Swapsen_US
dc.typeTechnical Reporten_US
dc.contributor.corporatenameGeorgia Institute of Technology. College of Managementen_US
dc.contributor.corporatenameGeorgia Institute of Technology. Financial Analysis Laben_US


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