Financial - Accounting Implications of Bonds

Author:Univ. prof., PhD Elena DOBRE

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Keywords:primary instruments, financial assets, placements, maturity, credits, receivable, control package

Abstract:
In the previous edition, the main criteria for bonds differentiation have been presented.\r\n\r\nDerivatives creates rights and obligations with an effect of transferring between parties of one or more financial risks inherent to a primary basic financial instrument. They don’t have as result the transfer of an primary basic financial instrument when the contract is concluded, and such a transfer does not necessarily occur at the contract maturity. \r\n\r\nAn entity obligation to issue or to deliver its own equity instruments, as for example, options or bonds for assets subscription, represent an equity instrument as such and not a financial debt because the entity should not deliver cash or other financial assets. Similarly, the costs supported by an entity in order to purchase the right to reacquire its own equity instruments from another party represents a deduction of its own equity and not a financial asset (see SIC 16 - Share capital: Reacquired Own Equity Instruments (Treasury Shares).\r\n

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