FRA Non Current Liabities Flashcards Preview

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Flashcards in FRA Non Current Liabities Deck (14)
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1
Q

Amortisation

A

The process of allocating the cost of intangible long-term assets having finite useful life’s to accounting periods; the allocation of the amount of a bond premium or discount to the periods remaining until bond maturity

2
Q

Coupon Rate

A

The interest rate promised in a contract; this is the rate used to calculate the periodic expense interest payments

3
Q

Defined Benefit pension plans

A

Plans in which the company promises to pay a certain annual amount (defined benefit) to the employee after retirement. The company bears the investment risk of the plan assets

4
Q

Defined contribution pension plans

A

Individual accounts to which an employee and typically the employee make contributions during their working years and expect to draw on the accumulated funds at retirement. The employee bears the investment and inflation risk of plan assets.

5
Q

Direct financing leases

A

Under US GAAP, a type of finance lease, from a lesser perspective, where the present value of the lease payments (lease receivable) equals the carrying value of the leased asset. No selling profit is recognized at lease inception. The revenues earned by the lessor are financing in nature.

6
Q

Effective Interest rate

A

The borrowing rate or market rate that a company incurs at the issuance of a bond

7
Q

Face value

A

The amount of cash payable by a company to the bondholders when the bonds mature; the promised at maturity separate from any coupon payment

8
Q

Finance Lease

A

From the lesser perspective, under US GAAP, a type of lease which is more akin to the purchase of an asset by the lessee. From the lessor perspective, under IFRS, a lease which transfers substantially all the risks and rewards incidental to ownership of an underlying asset

9
Q

Lessee

A

The party obtaining the use of an asset through a lease

10
Q

Lessor

A

The owner of an asset that grants the right to use the asset to another party

11
Q

Market rate of interest

A

The rate demanded by purchases of bonds, given the risks associated with future cash payment obligations and of the particular bond issue

12
Q

Non current liabilities

A

Obligations that broadly represent a probable sacrifice of economic benefits in periods generally greater than one year in the future

13
Q

Operating lease

A

An agreement allowing a lessee to use some asset for a period of time; essentially a rental

14
Q

Sales- Type Leases

A

Under US GAAP a type of finance lease, from a lessor perspective, where the present value of the lease payments (lease receivable) exceeds the carrying value of the lease asset. The revenues earned by the lessor both a selling profit at inception and financing interest revenues

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