BUS 321 Study Guide - Midterm Guide: Market Rate, Debenture, Ob River

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 321
• Professor: simonsuwanyangyuan

Document Summary

Chapter 14: types of bonds, bearer/coupon = freely transf by owner, secured debt = secure by collateral, serial bonds = mature in instalments. Int to be paid = principal * stated rate. L/td generally measured @ amort cost, but can value @ fv under aspe (cid:862)fv optio(cid:374) Ifrs req fv option only if it results in more relevant info + req that non-performance risk (info about riskiness of cf associated w/particular invest) be incl in measurement. L if cv < reacqui: *see example in notes, costs of issuing bonds = incl underwriting fees, commission, etc. Issue new debt to another creditor & use cash to repay existing debt. In a continuation of debt w/: substantial modification of terms, transaction treated as settlement, situations where modifications are substantial, disc pv under new terms (disc using original effective rate) is at least 10% diff from disc. In-substance defeasance = when creditor is unaware of trust arrangement & debt may not be derecog.