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DarkNight_DS on 14 May 2009
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NJ5 said:
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?

 

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.

 

Any guesses as to what Sony has in the bank and what they have in debt in loans?

 



Prepare for termination! It is the only logical thing to do, for I am only loyal to Megatron.