What type of transaction decreases a liability and increases a liability.
A transaction that decreases a liability and increases another liability typically involves the transfer of an existing liability to a different party or the restructuring of existing liabilities. This could happen through the following types of transactions:
1. Debt Repayment and Borrowing: When a company repays a portion of its existing debt, it decreases its liability for that specific debt. Meanwhile, if the company borrows additional funds, it increases its liability with the new loan.
2. Debt Refinancing: In some cases, a company may choose to refinance its existing debt to obtain more favorable terms or lower interest rates. Refinancing involves paying off the current debt and simultaneously taking on a new liability with a different creditor.
3. Debt Conversions: Debt conversions occur when a liability is converted into a different type of liability. For example, convertible debt may be converted into equity, resulting in a decrease in the liability for the debt and an increase in shareholders' equity.
4. Restructuring or Settlements: Liabilities can also be adjusted through debt restructuring or settlements. In these cases, the terms of the existing liability are renegotiated, leading to a decrease in the original liability and the creation of a new liability arrangement.
To determine the exact impact on liabilities, you would need access to the company's financial statements, such as the balance sheet or relevant disclosure notes. These documents provide details about specific transactions and the resulting changes in liabilities.