compound financial instruments
DESCRIPTION
This presentation includes Retained Earnings, Treasury Stocks, and more.TRANSCRIPT
There must be a contract.
There are at least two parties to the contract.
The contract shall give rise to a financial asset of one party and financial liability or equity instrument of another party.
Market Value of Bonds with warrants
Share Warrants Outstanding
Less: Face Value of Bonds
= Discount/Premium of Bonds Payable
Bonds payable issued w/ share Bonds payable issued w/ share warrantswarrants
Cash xx
Disc. on Bondsxx
Bonds Payable xx
Share warrants outs. xx
Cash xx
Premiums on B/Pxx
Disc. on Bonds xx
Share warrants outs. xx
Cash xx
Share warrants outs. xx
Share Capital (# of shares x par val.) xx
Share Premium (balancing figure)xx
Market Value of Bonds w/o Conversion Privilege
Share Premium – Conversion PrivilegeLess: Face Value of Bonds
= Discount/Premium of Bonds Payable
Convertible BondsConvertible Bonds
Cash xx
Disc. on Bondsxx
Bonds Payable xx
Sh.Prem-conv.priv. xx
Cash xx
Premiums on B/Pxx
Disc. on Bonds xx
Sh.Prem-conv.priv. xx
Bonds Payable (@ Face Value) xx
Sh.Prem-conv.priv. xx
Premium on B/P (unamortized) xx
Share Capital (# of shares x par val.) xx
Share Premium (balancing figure)xx
•Retained Earnings xx
Share Dividends Payablexx
* Charged at cost of treasury shares
•Share Dividends Payable xx
Treasury Sharexx
•Retained Earnings-free xx
R/E appropriate for T/Sxx
•R/E appropriate for T/S xx
Retained Earnings-free xx
Non-distributable equity reserves usually Non-distributable equity reserves usually include the following:include the following:
Appropriaton reserve
Share premium reserve
Asset revaluation reserve
Other comprehensive income reserve
Retained Earnings, Beg. xx
Less: Correction of owners/prior period errors(xx)
Add: Change in accounting policy xx_
= Corrected beginning balance xx
+/- Net Income/(Net Loss) xx
- Dividends Declared during the year (xx)
- Appropriated for contingencies (xx)_
= Retained Earnings – free xx