Accounts Payable to be included while deriving NOA / NMA? method, writing, included

mamuka12

I'm writing to clarify the defintion of calculating Operating Liabilities and Monetary Liabilities.

1. Should we include the Accounts Payable while calculating the Operating Liabilities for NOA (Net Operating Asset) under aggregate accrusal?

2. Should we include the Accounts Payable while calculating the Monetary Liabilities for NMA (Net Monetary Asset) under temporal method?

Thanks,
JW

benbenxiong

Bilal Wrote:
-------------------------------------------------------
> Net Operating Assets= (Total Assets - Cash and
> Cash Investments) - (Total Liabilities - Long term
> Liabilities - Notes Payable).
>
> NMA = Yes it includes A/P


It's Net Operating Assets= (Total Assets - Cash and Cash Investments) - (Total Liabilities - Long term Liabilities - current portion of long term debt).

But Accounts payable is not included in NOA calculations.

DSquaredSlim

just remember to back out TOTAL DEBT. A/P or other current/non-interest bearing liabilities are NOT DEBT.

lucasg85

prophets,
I double checked, When calculating NOL, AP is not interest-bearing, therefore not really an operating liability. just remember the formula below
NOL: Liability less notes payable less long term debts.

Included in net monetary liability, you would want to add up the following:
Accounts payable, notes payable, long term debts



Edited 2 time(s). Last edit at Wednesday, May 18, 2011 at 01:40AM by passme.

Swanand

Net Operating Assets= (Total Assets - Cash and Cash Investments) - (Total Liabilities - Long term Liabilities - Notes Payable).

NMA = Yes it includes A/P

chandsingh

passme Wrote:
-------------------------------------------------------
> 1: NO. Operating Liability = Liability - Notes
> payable - Long term debts only
> 2: YES.


I guess I misunderstand your wording vs. the wording of the original question:

The Equation --> All liabilities - LT Notes - ST Notes

by definition includes Accounts Payable in it (and all other liabilities that are not interest bearing debts). So yes, it's included in the process. It's in there by virtue of definition.



Edited 1 time(s). Last edit at Wednesday, May 18, 2011 at 02:29AM by prophets.

profil

1: NO. Operating Liability = Liability - Notes payable - Long term debts only
2: YES.