BUSI 2160U Lecture Notes - Lecture 3: Pension, Disclose, Financial Statement Analysis
Document Summary
Long term: satisfied in more than one year: discounted to their present value. Current: satisfied in one year: recorded at face value. Accounts payable and accrued liabilities are usually shown together. Segregation as current and non-current not required. Liability or asset dependent on future amount. Contingent liabilities are: possible obligations dependent on future events, obligations with uncertainties about payments (amount or likelihood) A contractual agreement to enter into a transaction in the future: executory contract no recognition, off balance sheet obligation, can provide disclosure. A bond is a formal borrowing arrangement. Borrower has obligation to pay periodic interest and principal to lender: face value, maturity date, coupon rate, frequency of payment. Risk for securities sold in the market are rated by credit rating agencies. Big 3 credit rating agencies are: standards and poor (s&p, moody"s investor services, fitch ratings. Retractable bond: option of the purchaser. Proceeds from bond issue = pv of interest payments + pv of principal repayment.
