6.1 Background

This chapter describes how an entity applies the interest method in ASC 835-30 (see Section 6.2) and the fair value option in ASC 825-10 (see Section 6.3) to the subsequent accounting for debt. The evaluation of whether features embedded in debt must be separated and accounted for as derivatives under ASC 815-15 is addressed in Chapter 8. Chapter 7 discusses specialized accounting models that apply to certain types of debt.