Debenture Insert Page For Free

Liabilities are shown on the balance sheet as either current liabilities or long-term liabilities. Long-term liabilities are debts that are not required to be repaid within one year. Because debenture bonds fall into this category, they are placed on the balance sheet in the long-term liabilities section.

In the company's balance sheet, debentures are shown under the head .

A debenture is a document that acknowledges and contains the terms of a loan, which is typically secured by reference to charges over all or substantially all of the Borrower's property or assets.

2.4.3 Debentures issued at Premium The amount of premium is credited to Securities Premium account and is shown on the liabilities side of the balance sheet under the head Reserves and Surpluses.

In the same way, when the company issue debenture at discount the amount is debited to the discount on issue of debentures account. The amount is shown on the asset side of the balance sheet, under the head miscellaneous expenses, until written off.

US vs UK debentures In the US, a debenture is a medium to long-term loan, issued to a company by an investor. Think of it as an unsecured loan that is supplied in good faith unlike UK debentures, the loan is not backed up by physical assets; only by the company's good reputation in the eyes of the investor.

If the Company has issued the Debentures and they are to be redeemed after one year, then they are shown under Non-Current Liabilities in the Balance Sheet. If the Company has issued the Debentures and they are to be redeemed within one year, then they are shown under Current Liabilities in the Balance Sheet.