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42 Cards in this Set
- Front
- Back
A formal unconditional promise |
Bond |
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A contract of debt |
Bond |
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Initial recognition amount of the investment minus repayments + amortisation |
Amortized cost |
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A loss on the part of the bondholder |
Bond premium |
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A gain on the part of the bondholder |
Bond discount |
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Process of allocating the bond premium as deduction from the interest income and the bond discount as addition to interest income |
Amortization |
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Those which may be called an or redeemed by the issuing entity prior to their date of maturity |
Callable bonds |
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Those which give the bondholders the right to exchange their bonds for share capital |
Convertible bonds |
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Those which have a series of maturity dates or those bonds which are payable in installments |
Serial bonds |
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Those bonds that mature on a single date |
Term bonds |
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This method provides for an equal amount of premium or discount amortization each accounting period |
Straight line method |
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This method is applicable to serial bonds and provides for a decreasing amount of amortisation |
Bond outstanding method |
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This method provides for an increasing amount of amortisation |
Effective interest method or interest method |
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Developed from the bond outstanding column |
Fractions |
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Computed by multiplying the fractions by the amount of the premium |
Premium amortization |
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Coupon rate or stated rate appearing on the face of the bonds |
Nominal rate |
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The yield rate or market rate which is the actual or true rate of interest |
Effective rate |
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Rate that exactly discounts estimated future cash payments through the expected life of the bond |
Effective rate |
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The initial cost gradually increased by periodic amortization of discount or gradually reduced by periodic amortization of premium |
Carrying amount of the bond investment |
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Computed by multiplying the effective rate by the carrying amount of the bond |
Interest earned or interest income |
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Multiplying the nominal rate by the face amount of the bond |
Interest received |
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Equal to the present value of the principal plus the present value of future interest payments using the effective rate |
Market price of bonds |
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Determined for the number of interest period using the effective rate |
Present value of an ordinary annuity of 1 |
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Defined as property held by an owner or by the lessee under a finance lease to earn rentals for capital appreciation |
Investment property |
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From the perspective of the individual entity , the property leased to another subsidiary or its parent is considered as |
Investment property |
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From the perspective of the group as a whole and for purposes of consolidated financial statements , the property is treated as |
Owner-occupied property |
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Investment property is carried at fair value |
Fair value model |
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The investment property is carried at cost less any accumulated depreciation and any accumulated impairment loss |
Cost model |
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Price that would be received to sell an asset in an orderly transaction between market participants at the measurement date |
Fair value |
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The amount which the insurance firm will pay up on the surrender and cancellation of the life insurance policy |
Cash surrender value |
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The amount which the insured can borrow from the insurance firm with a cash surrender value as collateral security |
Loan value |
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Present obligations of an entity to transfer an economic resource as a result of past events |
Liabilities |
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Asset that represents a right with a potential to produce economic benefits |
Economic resource |
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Gives rise to liability by reason of normal business practice custom and a desire to maintain good business relation |
Constructive obligation |
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Past event that leads to a legal or constructive obligation |
Obligating event |
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financial liabilities that are incurred with an intention to repurchase in the near term |
Financial liabilities held for trading |
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Often attached to borrowing agreements which represents undertakings by the borrower |
Covenants |
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Period within which the entity can rectify the breach and during which the lender cannot demand immediate repayment |
Grace period |
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Line item for accounts payable notes payable |
Trade and other payables |
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Obligations which exists at the end of reporting period Although their amount is not definite |
Estimated liabilities |
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Income already received but not yet earned |
Deferred revenue |
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Consists of cash or property received from customers but with a refundable after compliance |
Refundable deposits |