| DarkNight_DS said: Ok, but if I borrowed 2 billion this year, then that is 2 billion of debt that I've incurred. Why is the debt not being reported in the financials? I can't borrow money without going into debt and without having to report my debt to the bank when I want to borrow money. How can a company borrow money and not report it?
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They do report it, but it's not reported as a loss.
The reason is that when you get a loan, you aren't really losing money (except for interest rates). You're adding a liability to your balance sheet ("I owe $1 billion plus interest to the bank"), but you also add an asset ("I have $1 billion more in cash now"). Then these two get added and the effect is nearly zero in terms of profit.
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