Bruemmer Co. has a $20,000, two-year note payable to Second City Bank that matures June 30, 2011. Bruemmer's management intends to refinance the note for an additional three years and is negotiating a financing agreement with Second City. In order to exclude this note from current liabilities on its December 31, 2010, balance sheet, Bruemmer Co. must

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To exclude the note from current liabilities on the December 31, 2010 balance sheet, Bruemmer Co. must demonstrate an ability to refinance the obligation before the 2010 financial statements are issued. This means that the negotiations with Second City Bank must be far enough along or a commitment from another lender must be obtained before the financial statements are released. Completing the refinancing before the balance sheet date or the note's maturity date would be ideal, but demonstrating the ability to refinance is sufficient for exclusion from current liabilities. Paying off the note would not be necessary if refinancing can be completed or demonstrated.