A conversion feature can add a lot of value for potential bondholders because the investor could take advantage of future company growth. In this article, we’ll discuss the basics of recording an issuance of convertible bonds and transferring the bond liability to equity accounts when the bonds are converted.

Companies pay taxes that are determined by specific country laws and regulations. However, taxable profits are rarely the same as financial accounting profits which gives rise to deferred taxes in financial statements. This article describes the basic rules of determining deferred tax assets and liabilities and their presentation in the cash flow statement.

Debt is a common financing tool for most corporations. In this article, we’ll discuss what happens when a company has trouble paying its legal bond obligations.

Aggressive corporate financial officers are always looking for sneaky ways to keep liabilities off the balance sheet. When the FASB issued interpretation FIN 46R, one such loophole was effectively cut off – the variable interest entity.

In this article, we’ll discuss progress billings, one of the facets of accounting for long-term contracts. More than just a record of invoices sent to the client, the amount of billings determine, in part, what appears on the balance sheet.

Corporate bonds are bought and sold in secondary financial markets around the world. This begs the question – can a company purchase its own bonds just like it can purchase its own stock?

In the first two parts of this article series, we discussed general capital lease accounting. For this final article, we’ll take a brief look at a special kind of transaction called a sale-leaseback.

In the first part of this article series about capital lease accounting, we discussed accounting for the asset and related liability from the perspective of the lessee. Now we’ll turn to other side of the transaction to look at accounting from the lessor’s perspective.

In this three-part article series, we’ll discuss the accounting treatment for various aspects of a leasing arrangement. This first part will cover capital lease accounting by the lessee (the party that takes possession of an asset in exchange for monthly lease payments).

Derivative accounting is a complex subject filled with complicated transactions, financial statement presentations, and disclosures. In this article, we’ll scratch the surface of the derivative field and hedging activities, which are integrally related to derivatives.