BONDS PAYABLE REVIEWER.pdf - BONDS PAYABLE TYPES: • • • • •...

BONDS PAYABLE
TYPES:
• SERIAL BONDS - bonds that mature in series/ installments
• TERM BONDS - bonds that mature on a single date.
• SUBORDINATED BONDS- bonds that rank below the amounts owing to general creditors.
• DEBENTURE BONDS - unsecured bonds without collateral.
• COLLATERAL TRUST BONDS- bonds secured by investments in shares and bonds.
MEASUREMENT:
1. (Not designated at Fair value through Profit or Loss)
Bonds Payable = Fair Value – Transaction Cost directly attributable to bonds payable.
Fair Value = Present Value of Future cash payments to settle bonds liability.
Cash Received = Fair Value – Bond issuance Cost
2. (designated to Profit or Loss)
EXPENSED immediately.
SUBSEQUENT MEASUREMENT:
1. At AMORTIZED COST using effective interest method.
2. At FAIR VALUE through profit or loss.
AMORTIZED COST = (Initial bond measurement – Principal Repayment) + cumulative amortization of
discount.
OR
AMORTIZED COST = (Initial bond measurement – Principal Repayment) - cumulative amortization of
Premium using effective interest method.

1. Bonds payable not designated at fair value through profit or loss shall be measured initially at
2. After initial recognition, bonds payable shall be measured at