January 27, 2011
Please direct this to Martha Haines.
For units of local government that have a significant exposure to general obligation capital appreciation bonded debt, and a material amount of accrued interest expense, shouldn't the industry be recognizing the accured interest expense as direct debt?
I realise that under State of Ill law, accrued interest expense doesn't affect the limited debt margin. However, I don't see why that matters.
Alternate Revenue Source Bonds don't affect the debt margin either, yet they are typically included as direct debt.
Please let me know what you think.
John Repsholdt