Business Administration 2257 Lecture Notes - Dbrs, Contingent Liability, Pension Fund
28 Feb 2013
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Liabilities: current liabilities: will be paid off in a year. Recorded at their face value: long-term liabilities: takes more than a year to be paid off. We have to calculate the present value or discounted value of them. Also calculate which portion is due in the next twelve months and move that to current liabilities. Disclosure see page 463 in text for example: debt/equity ratio p10-10 and p10-10a. Trust fund of ,000 when you graduate. What is the present value if the discount rate is 2% and you will graduate in 3 years? (remember present value is always less: 25,000 * 1 / (1. 02)3, 25,000 * . 94, 23,500. High, low: amount can be reasonability estimated. Don"t record if you can"t estimate: other information available. Bonds: a means of raising money for a company (usually a lot of money over a long period of time) Face value, maturity date and coupon rate: looks like:
