Fao 1971 ITFC scum chap. A lesson in accounting for you. Taken direct from ifrs website

Liabilities
On the balance sheet, accountants calculate liabilities along with equity to match all the assets a business has. While a shareholder loan may count as cash on the asset side of the balance sheet, it is debt - a liability on the other side, because the business MUST pay the loan back, usually at a particular INTEREST RATE. Equity, although counted with liabilities, does not obligate the business to pay back money as a loan does, so accountants separate the shareholder from the money the shareholder used to buy stock in the first place.

Hope this helps, shareholders loans are classed as debt.

Posted By: Tony Martin on April 19th 2014 at 21:34:36


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