ch 16 J/e Flashcards
(25 cards)
j/e for purchased call options
Dr. Derivatives-Financial Asset/Liabilities
Cr. Cash
Purchased call option: Remeasurement
Dr. Derivative-financial asset/liabilities
Cr. Gain/Loss on derivatives
Purchased Call Option: J/E to record net settlement
Dr. Cash
Dr. Gain/Loss on Derivatives
Cr. Derivatives-Financial Assets/Liabilities
Purchased Call Option—Gross
Settlement. J/E to record gross Settlement
Dr. FV-NI invesstments
Dr. Gain/Loss on Derivatives
Cr. Ferivatives-Financial Asset/Liabilities
Cr. Cash
Forward purchase
Purchase: Fair value at inception is zero. No j/e required
Forward Contract: Subsequent
Remeasurement
1) FV must be recognized
Dr. Derivatives- Financial Asset/Liabilities
Cr. Gain or loss on Derivatives
2) Gain/Loss
Dr. Gain or loss on Derivatives
Cr. Derivatives- Financial Assets/Liabilities (presented on sfp as liability)
Forward Contract: Settlement
Dr. Gain or loss on derivatives
Dr. Derivatives=FA/L
Cr. Cash
Dr. Cash
Dr. Derivatives- FA/L
Dr. Gain/Loss on Derivatives
Cr. Cash
Future Contracts: Record the initial deposit
Dr. Derivatives-Deposit
Cr. Cash
Accounting for Futures Contract
To record a decrease in value of contract (1/3)
Dr. Gain/Loss on Derivatives
Cr. Derivatives-FA/L
Accounting for Futures Contract- Additional deposit required to bring deposit back to $100
Dr. Derivatives-Deposit
Cr. Cash
Accounting for Futures Contract To close the contract with a net settlement- no delivery
Dr. Cash
Dr. Derivatives-FA/L
Cr. Derivatives Deposit
Accounting for Derivatives Involving the Entity’s Own Shares- J/E to record purchase of option
The contract would be treated as an equity transaction because it
is a “fixed for fixed” contract
Dr. Contributed surplus- Stock options
Cr. Cash
Recording Convertible Debt at Issuance J/E to record issuance (IFRS and ASPE) (1/2)
Dr. Cash
Cr. Bonds Payable
Cr. Contributed Surplus-conversion rights
Recording Convertible Debt at Issuance J/E to record issuance (ASPE) valuing the equity component at zero as an accounting choice(2/2)
Dr. Cash
Cr. Bonds payable
Convertible Debt at Conversion
To record conversion of convertible bonds
Dr. Bonds payable
Dr. Contributed Surplus-Conversion Rights (Derecognize option value because option has been exercised)
Cr. Common Shares
Book value method has been used to determine value of shares
- Required under ifrs and aspe
Convertible Debt—Induced Conversion
(ASPE)
J/E (2/2)
Dr. Bonds payable
Dr. Loss on redemption of bonds
Dr. Contributed surplus-Conversion rights
Dr. Retained Earnings
Cr. Common Shares
Cr. Cash
Convertible Debt—Induced Conversion
(ASPE) (1/2) Allocation the premium first
Total amount of inducement:
Less: Allocation to the bond
fv of bond
less: CV of ond
Allocation of equity
Convertible Debt—Induced Conversion
(IFRS)
Dr. Bond Payable
Dr. Loss on redemption of bonds
Dr. Contributed Surplus-Conversin rights
Cr. C/S
Cr. Cash
Convertible Debt at Retirement (ASPE) To record early retirement
Dr. Bonds payable
Dr. Loss on redemption of bonds
Dr. CS-CR
Dr. RE
Cr. Cash
Accounting for an ESOP
To record employee purchase of options
Dr. Cash
Cr. CS-Stock options
Accounting for an ESOP
To record the exercise of options
Dr. Cash
Dr. CS-Stock options
Cr. C/S
CSOP—Issuance and Expense Recognition
No entry on grant date (hasn’t started yet)
Reconize the expense in period which employee provides the service
Dr. Compensation Expense
Cr. CS-Stock options
CSOP—Exercise
To record exercise of options
Dr. Cash
Dr. CS-Stock options
Cr. Common shares
CSOP—Expiration
To record the expiration of options
Dr. Contributed surplus-SO
Cr. Contributed surplus-Expired stock options
