Misconception · MIS:face-amount-always-equals-carrying-amount

Mistaken idea “Face amount always equals carrying amount”

Mistaken reasoning: This mistake substitutes contractual principal for the debt's measured net carrying amount.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Face determines contractual principal. Price, basis adjustments, and amortization determine carrying amount.

Where to watch

When this mistake may appear

  • A bond is issued away from face.
Check your work

Your work may contain this mistake if:

  • Record the liability at face and ignore the price difference.