What is meant by issue of debentures as collateral Security?

Q: What is meant by debentures?

A: A company has several sources from where it can raise funds. It can issue equity shares and the…

Q: What are Contingent Liabilities?  Give an example.  What are the factors that determine the reason…

A: A liability, the occurrence of which is uncertain that is it may or may not occur is known as a…

Q: In what situations is interest capitalized?

A:

Q: WHAT IS THE ADVANTAGE OF offshore trust?

A: Offshore trust companies can be defined as those companies which help customers with a high net…

Q: What interest rates should be used in determining the amount of interest to be capitalized? How…

A:

Q: How do Capital Guaranteed Notes function?

A: Capital notes are short term unsecured debts which are generally issued  by firms in order to pay…

Q: In what situations is interest capitalized rather than expensed?

A: Capitalized interest is the cost of the funds used to finance the construction of a long term asset…

Q: What are contingent liabilities?

A: Liabilities by and large, are a commitment to, or it is an amount that one owes to another person.…

Q: How are the terms “probable,” “reasonably possible,”and “remote” related to contingent liabilities?

A:

Q: What does it mean for CHS to securitize its receivables?

A: Compensating balance: A compensating balance is a minimum amount of cash that must be maintained by…

Q: explain whether true or false : The interest rate parity does hold in realty

A: Interest rate parity is an releationship between spot exchange rate and the forward exchane rate…

Q: In hedging, interest rate swap (IRS) can be used to hedge against rising rates, falling rates,…

A: to understand the topic better, the interest rate swap is defined as the contract between any two or…

Q: What is the fair value option? Briefly describe the controversyof applying the fair value option to…

A: Meaning of fair value option:

Q: What is the impact of annuity dues in consideration to business matter?

A: Annuity Due: It is the fixed amount of payment that is due immediately at the beginning of each…

Q: What part of a firm's balance sheet can be used as collateral?

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: For accounting purposes, what type of hedge is the forward contract? a. A cash flow hedge b. A…

A: A forward contract is a contract between the two parties in which both parties agrees to exchange…

Q: What are spontaneous liabilities?

A: spontanous liabilities

Q: What is meant by mortgage foreclosure, and what alternatives are there to such action?

A: A mortgage refers to a debt instrument which is secured by collateral of a piece of land or a real…

Q: What is meant by Premium on redemption of debentures account?

A: Premium on redemption of debenture account: Premium on redemption of debenture is the amount paid to…

Q: What is meant by issue of debentures as “Purchase Consideration”.

A: Debenture is a long term or medium term debt instrument issued to borrow loan.

Q: How are liabilities classified? Why is it important to classify liabilities?

A: A liability is a present obligation of the enterprise arising from past events, the settlement of…

Q: What does issue of debentures for consideration other that cash means?

A: Debenture Issued for consideration other than cash:A company can purchase assets from other…

Q: What is the purpose of a fair value hedge?

A:

Q: Discuss the priorities among the various parties who may have competing interests in collateral and…

A: Debtor refers to the entity who is a legal entity and the one who owes a debt to another entity. And…

Q: practice, which one of the following factors plays the most important role in the distribution of…

A: When company goes for liquidation than company distribute the funds available for distribution among…

Q: Explain the rights of a creditor against a surety and the rights of a surety, including those of a…

A: Surety bond used to involve the promise through the one party by assuming the responsibilities…

Q: What do you mean by “Trust Deed” in context of debenture?

A: A trust deed moreover called a deed of trust could be an archive that's often used in Joined…

Q: How Grantor can Release from Assumed Debt?

A: Answer: Release of grantor from assumed debt: It is one of the assumptions of mortgage. When a…

Q: Does collateral reduces moral hazard by borrowers? Why?

A: Introduction: A collateral asset is an asset that a lender accepts as payment for a loan. Depending…

Q: Is Collateralized debt obligation a good investment? Please explain in details.

A: A collateralized debt obligation also known as a CDO is a complex structured credit product which is…

Q: Why is premium on issue of debentures considered a capital profit?

A: Debenture: Debenture is a type of debt instrument and it is unsecured by collateral. Since,…

Q: How are refundable deposits and customer advances similar? How do they differ?

A: Refundable Deposits: Refundable deposits are that money in advance offered by the customer. It is a…

Q: When are losses in noncurrent security investments recognized?

A: Noncurrent security investments are held for more than 1 year.

Q: Explain the nature of interest on debentures.

A: A fixed amount of money which is paid in the form of interest to the holders of the debentures at…

Q: Is Bitcoin considered as a financial derivative?

A: Finance is the source for business and is required for the flow of money for any operations.

Q: Explain how electing the fair value option affects accounting for investments.

A: The fair value option provides the business the option to record the financial instruments at fair…

Q: Explain why a security is considered to be liquid and state its advantage to an investor

A: A liquid asset is a resource that can be quickly transformed within a short period of time into…

Q: A credit derivative allows creditors and debtors to _________ their exposure to credit risk. For…

A: A credit derivative is a financial contract that allows the parties to minimize their exposure to…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.