ACTG 3120 Lecture Notes - Lecture 3: Cash Flow Hedge, Financial Instrument, Cash Flow

• School: York University
• Department: Accounting
• Course: ACTG 3120
• Professor: Elizabeth Farrell

Document Summary

Cash flow and fv hedging don"t need to know. Hybrid financial instrument: elements of both equity and debt. Methods of recording: liability classification, equity classification. When credtiros can demand pay through legal right. Issuer doesnt has the right to defer payments indefinetly (maybe a period of time or none at all) Principal/annual periodic returns settled with company"s shares based on share price date of payment. Payment not mandatory or at issurers option. Event is abnormal or highly unlikely and uncontrolable. Principal/annual periodic returns settled with company"s shares based on fixed # of shares. Issuer has the right to defer payments indefinetly (not just a period of time but forever) Tterm preferred shares: must be redeemed on a specific date. Retractable shares: option by shareholders to redeem shares. Pv of the future stream of payments recorded as a liability (if declared or not)