Trials and Tribulations of Calculating Covenant Capacity — Part 2 — Rejigging Capacity

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Trials and Tribulations of Calculating Covenant Capacity — Part 2 — Rejigging Capacity

Alice Holian's avatar
Brian Dearing's avatar
  1. Alice Holian
  2. +Brian Dearing
9 min read

(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.

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