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Refer to Note 20, Financial Instruments. h. i What is the fair-value of Rite Aid's fixed-rate debt at February 28, 2004? Why does it differ from the carrying amount? What is the fair-value of the variable-rate debt at February 28, 2004? Why does it not differ from its carrying amount? ii iii Why would financial statement users want to know the fair-value of Rite Aid's debt? 20. Financial Instruments The carrying amounts and fair values of financial instruments at February 28, 2004 and March 1, 2003 are listed as follows: 2003 2004 Fair Value Carrying Amount Fair Value Carrying Amount $1,150,000 $1,150,000 $1,372,500 $1,372,500 $2,558,497 $2,640,995 $2,313,942 $2,027,603 Variable rate indebtedness Fixed rate indebtedness . Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes approximate their fair values due to the short-term nature of the obligations and the variable interest rates Long-term indebtedness: The fair values of long-term indebtedness is estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics

Refer to Note 20, Financial Instruments. h. i What is the fair-value of Rite Aid's fixed-rate debt at February 28, 2004? Why does it differ from the carrying amount? What is the fair-value of the variable-rate debt at February 28, 2004? Why does it not differ from its carrying amount? ii iii Why would financial statement users want to know the fair-value of Rite Aid's debt? 20. Financial Instruments The carrying amounts and fair values of financial instruments at February 28, 2004 and March 1, 2003 are listed as follows: 2003 2004 Fair Value Carrying Amount Fair Value Carrying Amount $1,150,000 $1,150,000 $1,372,500 $1,372,500 $2,558,497 $2,640,995 $2,313,942 $2,027,603 Variable rate indebtedness Fixed rate indebtedness . Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes approximate their fair values due to the short-term nature of the obligations and the variable interest rates Long-term indebtedness: The fair values of long-term indebtedness is estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter24: Enterprise Risk Management
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Refer to Note 20, Financial Instruments. h. i What is the fair-value of Rite Aid's fixed-rate debt at February 28, 2004? Why does it differ from the carrying amount? What is the fair-value of the variable-rate debt at February 28, 2004? Why does it not differ from its carrying amount? ii iii Why would financial statement users want to know the fair-value of Rite Aid's debt?
Transcribed Image Text:Refer to Note 20, Financial Instruments. h. i What is the fair-value of Rite Aid's fixed-rate debt at February 28, 2004? Why does it differ from the carrying amount? What is the fair-value of the variable-rate debt at February 28, 2004? Why does it not differ from its carrying amount? ii iii Why would financial statement users want to know the fair-value of Rite Aid's debt?
20. Financial Instruments The carrying amounts and fair values of financial instruments at February 28, 2004 and March 1, 2003 are listed as follows: 2003 2004 Fair Value Carrying Amount Fair Value Carrying Amount $1,150,000 $1,150,000 $1,372,500 $1,372,500 $2,558,497 $2,640,995 $2,313,942 $2,027,603 Variable rate indebtedness Fixed rate indebtedness . Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes approximate their fair values due to the short-term nature of the obligations and the variable interest rates Long-term indebtedness: The fair values of long-term indebtedness is estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics
Transcribed Image Text:20. Financial Instruments The carrying amounts and fair values of financial instruments at February 28, 2004 and March 1, 2003 are listed as follows: 2003 2004 Fair Value Carrying Amount Fair Value Carrying Amount $1,150,000 $1,150,000 $1,372,500 $1,372,500 $2,558,497 $2,640,995 $2,313,942 $2,027,603 Variable rate indebtedness Fixed rate indebtedness . Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes approximate their fair values due to the short-term nature of the obligations and the variable interest rates Long-term indebtedness: The fair values of long-term indebtedness is estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics
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