125. Part 1: Briefly explain a bond contract and its relationship to cash flows.
Part 2: Define the following terminology with respect to bonds:
a. Face Value
b. Principal
c. Maturity Value
d. Market Value
e. Coupon Interest Rate
f. Historical Market Interest Rate or Initial Yield to Maturity
g. Current Market Interest Rate
126. How are bonds measured at issuance?
INITIAL MEASUREMENT OF BONDS
127. Describe what bond provisions exist.
BOND PROVISIONS
128. What are the cash flows patterns related to bonds?
ACCOUNTING FOR BONDS
129. When a company issues bonds, it must sometimes issue them at a discount, while at other times it will
issue them at a premium.
Required:
Discuss the economic circumstances that surround the situations where bonds are issued at discounts or
premiums. Use examples where appropriate.
130. What are the general principles for measuring financial instruments?
MEASUREMENT OF FINANCIAL INSTRUMENTS: GENERAL PRINCIPLES
131. How are notes valued and accounted for under the authoritative guidance?
ACCOUNTING FOR NOTES
132. What are the requirements for the disclosure of the carrying and fair values of debt?
DISCLOSURES OF CARRYING AND FAIR VALUES OF DEBT
133. Discuss the fair value option in accounting for certain assets and liabilities.
FAIR VALUE OPTION
134. Describe the various methodologies in accounting for leases.
ACCOUNTING FOR LEASES
135. Describe the effect of the operating and capital lease methods on the financial statements of the lessee.
EFFECT OF THE OPERATING AND CAPITAL LEASE METHODS ON THE FINANCIAL STATEMENTS
OF THE LESSEE
136. What factors enter into choosing the accounting method for leases under U.S. GAAP and IFRS?
CHOOSING THE ACCOUNTING METHOD FOR LEASES
137. How does a lessor account for leases?
ACCOUNTING BY THE LESSOR
138. What are the effect of the operating and capital lease methods on the financial statements of the lessor?
EFFECT OF THE OPERATING AND CAPITAL LEASE METHODS ON THE FINANCIAL STATEMENTS
OF THE LESSOR
139. What disclosures are required for leases?
LEASE DISCLOSURES