Under IFRS companies do not use a
A) discount account.
B) premium account.
C) bonds payable account.
D) discount or premium account.

Question

Quizplus · Accepted Answer

Under IFRS, companies account for bonds at their amortized cost using the effective interest rate method. Therefore, there is no need to have separate discount or premium accounts. Instead, any discount or premium is incorporated into the carrying value of the bonds payable account. Under IFRS, companies do not use a separate discount or premium account to record the difference between the face value of a bond and the amount received when it is issued. Instead, the carrying amount of the bond is adjusted so that the effective interest rate is constant over the life of the bond. This means that the bond payable account reflects the face value of the bond at all times, and any difference between this amount and the amount received is reflected in the interest expense recognized over the life of the bond.

Under IFRS Companies Do Not Use a