What does it mean to extinguish debt?

Debt extinguishment is the elimination of a debt by paying the full balance owed or by replacing it with another debt instrument.Click to see full answer. Keeping this in view, what is a debt extinguishment?The term extinguishment of debt refers to the process of removing this liability from the balance sheet of a company. Normally, this occurs as bonds reach their maturity date and holders are paid the face value of the security.Furthermore, what are debt extinguishment costs? Payments of Debt Extinguishment Costs. The cash outflow for incremental, external costs directly pertaining to an early extinguishment of debt, including legal costs and prepayment penalties, and excluding interest and repayment of debt principal. Furthermore, what does the word extinguish? to put out (a fire, light, etc.); put out the flame of (something burning or lighted): to extinguish a candle. to put an end to or bring to an end; wipe out of existence; annihilate: to extinguish hope. to obscure or eclipse, as by superior brilliance.Is loss on extinguishment of debt non cash?A non-cash charge is a write-down or accounting expense that does not involve a cash payment. Depreciation, amortization, depletion, stock-based compensation, and asset impairments are common non-cash charges that reduce earnings but not cash flows.