Apart from borrowing from hanks, a firm or an individual can obtain funds in a financial market in two ways. The most common method is to issue a (61) , such as a bond or a mortgage, which is a (62) by the borrower to pay the holder of it at (63) until a specified date, when a final payment is made. The (64) of it is the time of expiration date. The second method of raising funds is by issuing (65) , such as common stock, which are claims to share in the net income and the assets of a business.
(46)
A.debt instrument
B.letter of credit
C.letter of guarantee
D.certificate of deposit
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:
Repayment of the term loan relies on
A.the net inflow of future funds of the assets financed
B.the net outflow of the future funds of the assets financed
C.the total assets of the borrowing firm
D.the total liabilities of the borrowing firm
第3题:
The borrower may draw the funds from the credit aggregates within the time limit for expanding their operations.
A.Right
B.Wrong
C.Doesn't say
第4题:
An industrial corporate can meet its financial needs by seeking funds from the capital market.
A.Right
B.Wrong
C.Doesn't say
第5题:
In the foreign exchange market, which is made up of banks' traders and brokers, prices (61) every minute (62) to supply and demand. For safety's sake, a branch will get a rate from their traders for a big transaction. Therefore the traders give their branches lists of exchange rates (63) they may buy and sell notes and payments in the main currencies.
Whenever a bank in Britain makes a payment in foreign currency, or makes a payment in sterling to a non-resident, the payment has first to (64) under British exchange control regulations. The bank itself can usually authorize the payment after seeing a document such as an invoice to show that the payment is due; but cases (65) borrowing and lending have to be referred to the Bank of England.
(46)
A.alter
B.vary
C.turn
D.convert
第6题:
It can be inferred from the passage that international students in the programs __.
A. get full scholarship
B. pay no tuition
C. get no financial support
D. earn more money
第7题:
第8题:
第9题:
第10题:
Which two statements are true about using the isUserInRole method to implement security in a Java EEapplication?()
第11题:
Exiting from a synchronized block.
Calling the wait method on an object.
Calling the notify method on an object.
Calling the notifyAll method on an object.
Calling the setPriority method on a thread object.
第12题:
It can be invoked only from the doGet or doPost methods.
It can be used independently of the getRemoteUser method.
Can return true even when its argument is NOT defined as a valid role name in the deployment descriptor.
Using the isUserInRole method overrides any declarative authentication related to the method in which it is invoked.
第13题:
听力原文:Commercial banks are mainly to provide short-term loans for the capital market with the acquired deposits and the funds from other channels.
(2)
A.Commercial banks mainly provide short-term loans for the capital market.
B.The capital market mainly depends on the acquired deposits and the funds from other channels.
C.Short-term loans are mainly from the acquired deposits and the funds from other channels.
D.Commercial banks mainly depend on the capital market for deposits and the funds.
第14题:
Security is required on loans so that ______.
A.the lending bank can enjoy higher interest receipts from the loan
B.the borrower is more willing to pay back the money
C.the funds borrowed will be repaid within a shorter period of time
D.more prime borrowers are attracted
第15题:
The term-loan agreement specifies a draw-down period of, say, up to two years, during which the funds must be used by the borrower; otherwise the borrower is not allowed to draw down any unused credit.
A.Right
B.Wrong
C.Doesn't say
第16题:
If you are staying in the UK for more than 6 months, it may be useful to open a UK bank account. There are a lot of advantages of having a UK current (checking) account:
Paying bills
Many landlords prefer to collect rent directly from a bank account.
You may be able to obtain cheaper services if you pay bills directly from a bank account,e. g. telephone, gas/water/electricity.
If you are given a chequebook, you can also write cheques as a safe way of paying for things.
Cash
You can easily obtain money from cash machines,or pay directly from your account using a debit card(借记卡).
Saving money
It is generally cheaper to use a UK account than it is to pay by credit card(信用卡)or withdraw (提取) cash from a foreign bank.
Employment
If you work in the UK,some employers require you to have a bank account so that you can get your pay.
Advantages of UK Current Account
Paying bills: 1) to pay rent directly from ①
2) to obtain ② services
3) to pay for things with cheques safely
Cash:1)to obtain money from ③ easily
21 to pay directly from your account
Saving money:cheaper to use a ④ account
Employment:to get your ⑤ through a bank account
第17题:
You will want two trees about ten feet apart, from _____ to suspend your tent.
(A) there (C) which
(B) them (D) where
选择D
可改写为you will want two tress about ten feet apart, to suspend your tent from.
只要有介词摆在空格之前,选项是which, them ,there ,where肯定是which
介词+which+动词不定式,整体做定语
第18题:
第19题:
第20题:
第21题:
Which two can directly cause a thread to stop executing?()
第22题:
Users can define policy to control traffic flow between which two components? ()(Choose two.)
第23题:
The program target and the program audience are not usually identical.
The program audience and the market segment are usually identical.
The market segment and the program target are usually identical.
The program target is larger than the market segment.