Far. Debt Instruments

Front 1

Can be bought or sold between 2 parties and has basic terms defined with amount borrowed, interest rate, maturity and renewal date.

Back 1

Debt Instruments

Front 2

Formal unconditional promise, made under seal to pay a specified sum of money at a determinable future date and to make periodic interest payments at a stated rate until the principal sum is paid.

Back 2

Bonds

Front 3

Certificate of indebtedness issued by the bond issuer which entitles the bondholder to receive principal and interest payments.

Back 3

Bond Certificate

Hint 3

Serves as proof of ownership over bonds by the imvestor.

Front 4

Unconditional contract between the bond issuer and the bondholder that specifies terms of the bond

Back 4

Bond Indenture

Hint 4

Deed of trust, bond resolution or bond contract

Front 5

Bonds which matures on a single date

Back 5

Term bonds

Front 6

Bonds with a series of maturity dates

Back 6

Serial bonds

Front 7

Bonds secured by a mortgage

Back 7

Mortgage bonds

Front 8

Bonds secured by stocks and bonds of other corporation

Back 8

Collateral trust bonds

Front 9

Bonds guaranteed by another party's promise to pay in case the bond issuer fails to make payments

Back 9

Guaranteed bonds

Front 10

Bonds without any security or collateral

Back 10

Debenture Bonds

Front 11

Classification of Debt Instrument

Back 11

FVTPL, FVOCI, FAAC

Front 12

Classification of Debt Instrument

Back 12

FVTPL, FVOCI, FAAC

Front 13

Measurement for Debt Instrument

Back 13

FV + Transaction cost, except FVTPL

Front 14

FV Determinant

Back 14

Quotation price in an active market

PV of related cash flows using EIR

Front 15

FS Presentation

Back 15

FVTPL-Current Assets

FVOCI, FAAC- Noncurrent Asset unless due within 12 months

Front 16

FVTPL Classification

Back 16

Held for trading

Irrevocable designation at FVTPL

Other investments that do not satisfy the requirements for measurement at AC and FVOCI

Front 17

FVTPL Initial Measurement

Back 17

Acquisition cost

TC expensed outright

Front 18

FVTPL Business Model

Back 18

To sell bonds in near term to take advantage of the fluctuations for short term profit taking

Front 19

FVTPL UG/UL

Back 19

P/L

Front 20

Premium or Discount in FVTPL

Back 20

Not amortized at the end of reporting period

Interest income will include the nominal or stated interest earned during the period.

Front 21

Realized Gain on Derecognition on FVTPL

Back 21

Recognized in P/L

Difference between the net selling price and CA (FV to date)

Consideration received XX

Less: Interest income

on investment sold XX

Transaction cost XX

Net Selling Price XX

LESS

CA @ FV TO DATE

Front 22

FAAC initial measurement

Back 22

Acquisition cost + Transaction cost

Front 23

Bond Schemes

Back 23

At face amount: Proceeds= Face Value

At Premium: Proceeds } Fave Value

At Discount: Proceeds { Face Value

Maturity Value : Face Amount

Front 24

At Premium

Back 24

Effective Rate is less than Nominal Rate

Front 25

At Discount

Back 25

Effective rate is more than nominal rate

Front 26

Bond Computation on Purchase Price/ Present Value

Back 26

PV of Principla Payment

PV of Interest Payment

Front 27

Term Bonds Acquired in Between Interest Dates

Back 27

1 Compute the Present value of the bonds on the last interest date

Front 28

Purchase Price, PV Date of Acquisition, PV on last interest date formula

Back 28

Hint 28

Not yet done

Front 29

Acquisition of investment bonds with warrants

Back 29

Use Relative Fair Value to allocate the acquisition cost

Front 30

Computation of PV on serial bonds

Back 30

Front 31

Subsquent Measurement of FAAC

Back 31

Amorization by EIR

Front 32

Subsequent Measurement of FAAC

Back 32

Amortized cost using EIR

Front 33

Amortization of Premium or Discount

Back 33

EntroEnt