AFM291 Study Guide - Midterm Guide: Effective Interest Rate, Retained Earnings, Authorised Capital
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Accrued interest payable
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when you sell a bond later
We record most liabilities at amortized. We do have the opportunity to record at fair value if they are
going to be extinguished with fair valued asset
IFRS
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effective interest rate
ASPE
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effective interest rate or straight
-
line method
Amortize at discount increase B/P
Amortize at premium decrease B/P
If at maturity, there's no gain or loss
•
If we settle it prior to maturity, there could be gain or loss
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recorded through net income
•
If it's not a cash settlement, it'll be a conversion
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book value, no gain or loss
•
Bonds derecognize off balance sheet
Partial de
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recognizing: pro rate basis
Insubstance defeasance
Site restoration obligation
•
Debit land/equity, credit obligation
○
Increase obligation until maturity by debiting interest expense for IFRS or accretion expense
for ASPE
○
The cost of decommission need to be present valued
•
Asset retirement obligation
Chapter 13
Equity has lowest priority upon liquidation
Contributed capital, retained earnings, AOCI
Contributed capital: money owners bought into the company
Convertible or not
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Cumulative dividend or not
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Shares: has par or no par value
Voting rights for shares
Shares authorized, issued, outstanding
Put in Treasury shares; or
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Canceling shares
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When we reacquire shares
Types of appropriations on retained earnings
Comes from FVOCI
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Comes from re
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measurement adjustment
•
Recycling or no
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recycling method
Move AOCI to retained earnings
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AOCI
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only exist in IFRS
AFM 391 Page 2
Document Summary
Accrued interest payable - when you sell a bond later. We do have the opportunity to record at fair value if they are going to be extinguished with fair valued asset. Aspe - effective interest rate or straight-line method. If at maturity, there"s no gain or loss. If we settle it prior to maturity, there could be gain or loss- recorded through net income. If it"s not a cash settlement, it"ll be a conversion - book value, no gain or loss. The cost of decommission need to be present valued. Increase obligation until maturity by debiting interest expense for ifrs or accretion expense for aspe. Contributed capital: money owners bought into the company.