Explain the accounting for the issuance of securities with warrants attached or that have conversion privileges
ISSUE OF SECURITIES WITH WARRANTS ATTACHED OR CONVERSION PRIVILEGES
Firms sometimes issue bonds with stock warrants attached. They allocate the amount received between the bonds and the warrants based on their respective fair values. When firms issue convertible bonds U.S. GAAP requires firms to allocate the full issue price to the bonds and none to the conversion feature. IFRS, however, requires firms to allocate the issue price between the bonds and the conversion feature. The allocation involves estimating the
issue price of bonds with terms similar to those issued but without the conversion feature. The firm allocates this amount to the bonds and the remainder of the issue price to the conversion option.
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When responding positively to a request, the goal is to
A) increase future sales. B) leave the reader with a good impression of you and your firm. C) imply good news without clearly stating it. D) answer the most important questions. E) provide details that will help the reader make a decision.
The risk of incorrect acceptance relates to the:
A. efficiency of the audit. B. tolerable misstatement. C. preliminary estimates of materiality levels. D. effectiveness of the audit.
In preparing adjustments on the work sheet, which of the following accounts most likely would be added to the Account Name column?
a. Telephone Expense b. Retained Earnings c. Income Taxes Payable d. Accumulated Depreciation–Equipment
Answer the following statements true (T) or false (F)
1. National culture is how we communicate at work. 2. Managers should use the same methods of communication with different receivers. 3. A hostile sender/receiver relationship requires less communication time. 4. A receiver’s level of knowledge is easily measured by asking specific, open-ended questions and receiving feedback. 5. The communication process consists of an exchange of messages that are comprised of words.