During a reorganization, how should interest expense be reported on the financial statements?

Question

Quizplus · Accepted Answer

During a reorganization, interest expense should be reported on the income statement, but not classified as a reorganization item. This is because interest expense is a regular expense incurred during the normal course of business and not directly related to the costs of reorganization. However, if there are any interest costs directly related to the reorganization such as interest on debt incurred to fund the reorganization, then those costs can be reported as a separate reorganization item on the income statement.

During a Reorganization, How Should Interest Expense Be Reported on the Financial