When debt interest is accrued but not paid in cash, what is this term referred to?

The term that refers to debt interest that is accrued but not paid in cash is commonly known as "PIK interest." PIK stands for "Payment In Kind," which means that instead of making a cash payment, the interest is added to the outstanding principal balance of the loan. This allows borrowers to conserve cash while still accruing interest on the debt.

PIK interest is often used in various debt instruments, particularly in situations where borrowers want to avoid cash outflows, such as during times of financial strain. By accruing interest rather than paying it, the total amount owed can increase, potentially leading to higher costs in the long run, but it provides immediate cash flow relief.

The other terms mentioned refer to different concepts in accounting and finance. Deferred interest typically refers to interest that has been postponed but will eventually need to be paid, while capitalized interest relates to interest that is added to the cost basis of a long-term asset. Fixed interest refers to an interest rate that remains constant throughout the life of a loan and does not pertain specifically to the accrual of unpaid interest. Thus, PIK interest accurately represents the concept of accrued but unpaid interest in this context.