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This document contains 10 review questions about investment in debt securities. It asks about the characteristics of bonds, classifications of debt securities under IFRS 9, the business model and cash flow characteristics required to classify bonds as financial assets at amortized cost, initial measurement of debt securities, the difference and effect of amortizing bond premiums and discounts, why amortization is needed, what convertible bonds are, and how to reclassify bond investments between amortized cost and fair value under IFRS 9.
This document contains 10 review questions about investment in debt securities. It asks about the characteristics of bonds, classifications of debt securities under IFRS 9, the business model and cash flow characteristics required to classify bonds as financial assets at amortized cost, initial measurement of debt securities, the difference and effect of amortizing bond premiums and discounts, why amortization is needed, what convertible bonds are, and how to reclassify bond investments between amortized cost and fair value under IFRS 9.
This document contains 10 review questions about investment in debt securities. It asks about the characteristics of bonds, classifications of debt securities under IFRS 9, the business model and cash flow characteristics required to classify bonds as financial assets at amortized cost, initial measurement of debt securities, the difference and effect of amortizing bond premiums and discounts, why amortization is needed, what convertible bonds are, and how to reclassify bond investments between amortized cost and fair value under IFRS 9.
Answer the following questions: 1. What are the characteristics of a bond investment? 2. Based on IFRS 9, what are the classifications of investment in debt securities? 3. What is the business model and cash flow characteristics of a bond investment for it to be classified as financial asset at amortized cost? 4. What is the initial measurement of investment in debt securities? 5. What is the difference between bond premium and bond discount? 6. What is the effect of amortizing bond premium and bond discount on interest income? 7. Why is there a need to amortize discount or premium? 8. What are convertible bonds? 9. Based on IFRS 9, how do we reclassify bond investment at fair value to amortized cost? 10. Based on IFRS 9, how do we reclassify bond investment at amortized cost to fair value?