Covenant Compliance
Compute each financial covenant from the year-end balances and test it against its threshold.
- Ledger + loan covenants
How the result is read
A covenant breached at the balance sheet date can make the facility repayable on demand: the debt becomes current and going concern is in question, unless a waiver was obtained before year end (IAS 1.74, ASC 470-10-45). Each covenant is computed from the classified trial balance the way agreements usually define it, then tested as a maximum or a minimum; headroom under 10% is listed, because it is the same question one quarter later. Where an agreement defines a term differently, its definition governs.
In the application
Covenant Compliance is filed under Cash & financing, index letter G. "Run all analyses" runs it with every other analysis the ledger and the documents loaded can answer. The worksheet states the population it tested on its face — or "Not applicable" with the reason when a column it depends on is empty — and the Excel workbook the engagement exports files it under G, beside an index of the source files with their SHA-256 fingerprints.
Read it with
Run your next audit file test without the Excel crash.
One free engagement to evaluate, valid 60 days. The ledger never leaves the machine.
- 20 minutes
- Runs on a fictional engagement
- No client data required