Intermediate Accounting

Front 1

A formal unconditional promise

Back 1

Bond

Front 2

A contract of debt

Back 2

Bond

Front 3

Initial recognition amount of the investment minus repayments + amortisation

Back 3

Amortized cost

Front 4

A loss on the part of the bondholder

Back 4

Bond premium

Front 5

A gain on the part of the bondholder

Back 5

Bond discount

Front 6

Process of allocating the bond premium as deduction from the interest income and the bond discount as addition to interest income

Back 6

Amortization

Front 7

Those which may be called an or redeemed by the issuing entity prior to their date of maturity

Back 7

Callable bonds

Front 8

Those which give the bondholders the right to exchange their bonds for share capital

Back 8

Convertible bonds

Front 9

Those which have a series of maturity dates or those bonds which are payable in installments

Back 9

Serial bonds

Front 10

Those bonds that mature on a single date

Back 10

Term bonds

Front 11

This method provides for an equal amount of premium or discount amortization each accounting period

Back 11

Straight line method

Front 12

This method is applicable to serial bonds and provides for a decreasing amount of amortisation

Back 12

Bond outstanding method

Front 13

This method provides for an increasing amount of amortisation

Back 13

Effective interest method or interest method

Front 14

Developed from the bond outstanding column

Back 14

Fractions

Front 15

Computed by multiplying the fractions by the amount of the premium

Back 15

Premium amortization

Front 16

Coupon rate or stated rate appearing on the face of the bonds

Back 16

Nominal rate

Front 17

The yield rate or market rate which is the actual or true rate of interest

Back 17

Effective rate

Front 18

Rate that exactly discounts estimated future cash payments through the expected life of the bond

Back 18

Effective rate

Front 19

The initial cost gradually increased by periodic amortization of discount or gradually reduced by periodic amortization of premium

Back 19

Carrying amount of the bond investment

Front 20

Computed by multiplying the effective rate by the carrying amount of the bond

Back 20

Interest earned or interest income

Front 21

Multiplying the nominal rate by the face amount of the bond

Back 21

Interest received

Front 22

Equal to the present value of the principal plus the present value of future interest payments using the effective rate

Back 22

Market price of bonds

Front 23

Determined for the number of interest period using the effective rate

Back 23

Present value of an ordinary annuity of 1

Front 24

Defined as property held by an owner or by the lessee under a finance lease to earn rentals for capital appreciation

Back 24

Investment property

Front 25

From the perspective of the individual entity , the property leased to another subsidiary or its parent is considered as

Back 25

Investment property

Front 26

From the perspective of the group as a whole and for purposes of consolidated financial statements , the property is treated as

Back 26

Owner-occupied property

Front 27

Investment property is carried at fair value

Back 27

Fair value model

Front 28

The investment property is carried at cost less any accumulated depreciation and any accumulated impairment loss

Back 28

Cost model

Front 29

Price that would be received to sell an asset in an orderly transaction between market participants at the measurement date

Back 29

Fair value

Front 30

The amount which the insurance firm will pay up on the surrender and cancellation of the life insurance policy

Back 30

Cash surrender value

Front 31

The amount which the insured can borrow from the insurance firm with a cash surrender value as collateral security

Back 31

Loan value

Front 32

Present obligations of an entity to transfer an economic resource as a result of past events

Back 32

Liabilities

Front 33

Asset that represents a right with a potential to produce economic benefits

Back 33

Economic resource

Front 34

Gives rise to liability by reason of normal business practice custom and a desire to maintain good business relation

Back 34

Constructive obligation

Front 35

Past event that leads to a legal or constructive obligation

Back 35

Obligating event

Front 36

financial liabilities that are incurred with an intention to repurchase in the near term

Back 36

Financial liabilities held for trading

Front 37

Often attached to borrowing agreements which represents undertakings by the borrower

Back 37

Covenants

Front 38

Period within which the entity can rectify the breach and during which the lender cannot demand immediate repayment

Back 38

Grace period

Front 39

Line item for accounts payable notes payable

Back 39

Trade and other payables

Front 40

Obligations which exists at the end of reporting period Although their amount is not definite

Back 40

Estimated liabilities

Front 41

Income already received but not yet earned

Back 41

Deferred revenue

Front 42

Consists of cash or property received from customers but with a refundable after compliance

Back 42

Refundable deposits