Trials and Tribulations of Calculating Covenant Capacity — Part 2 — Rejigging Capacity
- Alice Holian
- +Brian Dearing
(Re)Calculating Covenant Capacity
In Part One of “Trials and Tribulations of Calculating Covenant Capacity” we discussed shrinking numerators and the effects of IFRS 16 treatment. In Part Two, we dive into how certain financial calculation mechanics, such as reclassification and re-allocation, can create unexpected covenant capacity by drawing on other, potentially unrelated, capacity.