Lesson details
- Estimated study time
- 95 min
Learning objectives (2)
Two disclosure workpapers can sit beside the debt ledger without becoming the ledger.
Fair value option boundary
The case supplies whether an instrument is eligible, whether Cedar Trail made a valid election at a permitted event, and the period-end fair value. Learners identify the resulting measurement and presentation questions, including the applicable own-credit component. They do not elect the option after observing the desired earnings result, and they do not manufacture fair value from the amortized-cost schedule.
Contractual maturity schedule
List principal due by the required periods from the contract. Do not substitute net carrying amount for contractual principal. Then bridge the maturity total to the ledger:
contractual principal
± unamortized premium or discount
− unamortized issuance costs
= net debt carrying amount
Accrued interest, future coupon interest, current portions, and unresolved callable or covenant matters receive separate lines. A maturity table answers when principal is contractually due; current classification answers how a balance is presented at one reporting date.
Exit check
Given face amount of $2,000,000 and net carrying amount below face, prepare the contractual maturity row and the reconciling basis rows. Explain why changing the liability measurement basis would not rewrite the contractual maturity.