PREVIEW OF CHAPTER              14
                      Intermediate Accounting
                        IFRS 2nd Edition
                   Kieso, Weygandt, and Warfield 
   14-2
         14 Non-Current Liabilities
      LLEAEARRNNIINNGG  OOBBJJECECTTIIVEVESS
       After studying this chapter, you should be able to:
       1. Describe the formal procedures                5.  Explain the accounting for long-term 
           associated with issuing long-                    notes payable.
           term debt.                                   6.  Describe the accounting for the 
       2.  Identify various types of bond issues.           extinguishment of non-current liabilities.
       3.  Describe the accounting valuation for        7.  Describe the accounting for the fair 
           bonds at date of issuance.                       value option.
       4.  Apply the methods of bond discount           8.  Explain the reporting of off-balance-
           and premium amortization.                        sheet financing arrangements.
                                                        9.  Indicate how to present and analyze 
                                                            non-current liabilities.
    14-3
      BONDS PAYABLE
      Non-current liabilities (long-term debt) consist of an 
      expected outflow of resources arising from present obligations 
      that are not payable within a year or the operating cycle of 
      the company, whichever is longer. 
      Examples: 
      ► Bonds payable                     ► Pension liabilities 
      ► Long-term notes payable           ► Lease liabilities
      ► Mortgages payable
                                           Long-term debt has various 
                                           covenants or restrictions.
   14-4                                                                  LO 1
      Issuing Bonds
         Bond contract known as a bond indenture.
         Represents a promise to pay: 
              (1)  sum of money at designated maturity date, plus
              (2)  periodic interest at a specified rate on the maturity 
                   amount (face value).
         Paper certificate, typically a €1,000 face value. 
         Interest payments usually made semiannually. 
         Used when the amount of capital needed is too large for 
            one lender to supply.
   14-5                                                                LO 1
         14 Non-Current Liabilities
      LLEAEARRNNIINNGG  OOBBJJECECTTIIVEVESS
       After studying this chapter, you should be able to:
       1.  Describe the formal procedures                 5.  Explain the accounting for long-term 
           associated with issuing long-term debt.            notes payable.
       2. Identify various types of bond                  6.  Describe the accounting for the 
           issues.                                            extinguishment of non-current liabilities.
       3.  Describe the accounting valuation for          7.  Describe the accounting for the fair 
           bonds at date of issuance.                         value option.
       4.  Apply the methods of bond discount             8.  Explain the reporting of off-balance-
           and premium amortization.                          sheet financing arrangements.
                                                          9.  Indicate how to present and analyze 
                                                              non-current liabilities.
     14-6