negative
criticize
spiritually
shameful
affection
discovered
appreciate
confused
fit
admit
used
help
第1题:
(c) Issue of bond
The club proposes to issue a 7% bond with a face value of $50 million on 1 January 2007 at a discount of 5%
that will be secured on income from future ticket sales and corporate hospitality receipts, which are approximately
$20 million per annum. Under the agreement the club cannot use the first $6 million received from corporate
hospitality sales and reserved tickets (season tickets) as this will be used to repay the bond. The money from the
bond will be used to pay for ground improvements and to pay the wages of players.
The bond will be repayable, both capital and interest, over 15 years with the first payment of $6 million due on
31 December 2007. It has an effective interest rate of 7·7%. There will be no active market for the bond and
the company does not wish to use valuation models to value the bond. (6 marks)
Required:
Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending
31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’s
cash flow problems.
(Candidates do not need knowledge of the football finance sector to answer this question.)
(c) Issue of bond
This form. of financing a football club’s operations is known as ‘securitisation’. Often in these cases a special purpose vehicle
is set up to administer the income stream or assets involved. In this case, a special purpose vehicle has not been set up. The
benefit of securitisation of the future corporate hospitality sales and season ticket receipts is that there will be a capital
injection into the club and it is likely that the effective interest rate is lower because of the security provided by the income
from the receipts. The main problem with the planned raising of capital is the way in which the money is to be used. The
use of the bond for ground improvements can be commended as long term cash should be used for long term investment but
using the bond for players’ wages will cause liquidity problems for the club.
This type of securitisation is often called a ‘future flow’ securitisation. There is no existing asset transferred to a special purpose
vehicle in this type of transaction and, therefore, there is no off balance sheet effect. The bond is shown as a long term liability
and is accounted for under IAS39 ‘Financial Instruments: Recognition and Measurement’. There are no issues of
derecognition of assets as there can be in other securitisation transactions. In some jurisdictions there are legal issues in
assigning future receivables as they constitute an unidentifiable debt which does not exist at present and because of this
uncertainty often the bond holders will require additional security such as a charge on the football stadium.
The bond will be a financial liability and it will be classified in one of two ways:
(i) Financial liabilities at fair value through profit or loss include financial liabilities that the entity either has incurred for
trading purposes and, where permitted, has designated to the category at inception. Derivative liabilities are always
treated as held for trading unless they are designated and effective as hedging instruments. An example of a liability held
for trading is an issued debt instrument that the entity intends to repurchase in the near term to make a gain from shortterm
movements in interest rates. It is unlikely that the bond will be classified in this category.
(ii) The second category is financial liabilities measured at amortised cost. It is the default category for financial liabilities
that do not meet the criteria for financial liabilities at fair value through profit or loss. In most entities, most financial
liabilities will fall into this category. Examples of financial liabilities that generally would be classified in this category are
account payables, note payables, issued debt instruments, and deposits from customers. Thus the bond is likely to be
classified under this heading. When a financial liability is recognised initially in the balance sheet, the liability is
measured at fair value. Fair value is the amount for which a liability can be settled between knowledgeable, willing
parties in an arm’s length transaction. Since fair value is a market transaction price, on initial recognition fair value will
usually equal the amount of consideration received for the financial liability. Subsequent to initial recognition financial
liabilities are measured using amortised cost or fair value. In this case the company does not wish to use valuation
models nor is there an active market for the bond and, therefore, amortised cost will be used to measure the bond.
The bond will be shown initially at $50 million × 95%, i.e. $47·5 million as this is the consideration received. Subsequentlyat 31 December 2007, the bond will be shown as follows:
第2题:
听力原文:A bank or insurance company issues a document to guarantee that exporter will supply the goods or services as the required standard.
(4)
A.A bank or insurance company issues an advance payment bond.
B.A bank or insurance company issues a tender bond.
C.A bank or insurance company issues a maintenance bond.
D.A bank or insurance company issues a performance bond.
第3题:
A、That’s a good idea.
B、You are so cautious.
C、Why do you always want to do such thing?
D、Oh, forget it.
第4题:
Amortization is the allocation process of writing off bond premiums and discounts to interest expense over the life of the bond issue.()
第5题:
In a sense, a hotel sells to its guests tangible products instead of spiritual products.()
第6题:
债券收益(Bond yield)
债券收益是债券所获得的利率。
第7题:
What are large banks in large cities engaged in besides supplying bank deposit services?
A.They are engaged in international trade.
B.They do some particular business with foreigners.
C.They provide some specific ancillary services.
D.They establish correspondent banks in small cities.
第8题:
(A) can you
(B) do you
(C) shall you
(D) will you
正确答案:D
解答参考:D.此题考查对情态动词用法的掌握。can:能,会,表示有能力做某事;shall在表示征询意见时,只用于第一、第三人称作主语的疑问句中;will:用于主语为第二人称的疑问句中,表示请求。原句在祈使句后接疑问句,是征求意见或请求许可,且主语为第二人称,故选D)。【译文】我走后不要忘记帮我喂鸟,好吗?
第9题:
A.you visit
B.your visiting
C.you to visit
D.your visit us
第10题:
[A] intellectual
[B] sensual
[C] spiritual
[D] mental