In an LBO, financing fees are an:
A)Deferred asset
B)Asset
C)Deferred expense
D)Current liability

Name: In an LBO, financing fees are an: A)Deferred asset B)Asset C)Deferred expense D)Current liability
Brand: Quizplus
Rating: 4.8 (35 reviews)

Question

Quizplus · Accepted Answer

Financing fees in an LBO are considered a deferred expense because they are paid upfront by the borrower, but are amortized (expensed) over the life of the loan. This means that they are not immediately recognized as an expense on the income statement, but rather spread out over time.

In an LBO, Financing Fees Are An