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Chapter Summary

Section 13.1: Pricing Long-Term Liabilities​

  • Present value concept
  • Face value vs. present value
  • Market rate affects pricing

Section 13.2: Effective-Interest Method​

  • Interest based on carrying value
  • Principal reduction calculated
  • Proper interest allocation

Section 13.3: Bond Life Cycle​

  • Issuance, interest payments, maturity
  • Discount and premium bonds
  • Proper accounting throughout

Section 13.4: Special Topics​

  • Leases, convertible debt, restructuring
  • Special accounting considerations

Section 13.5: Luxembourg PCN Class 1​

  • Long-term debt accounts
  • Proper classification required

Section 13.6: Loan Accounting​

  • Proper recording and interest accrual
  • Tax implications
  • Documentation requirements