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Question
Both IFRS and U.S. GAAP require firms to classify deferred tax assets and liabilities as current or noncurrent depending on the classification of the asset or liability giving rise to the temporary difference.
Answer
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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B. borrowers.
C. both lenders and borrowers.
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