Make whole clause and Primary statements: Difference between pages

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''Securities''.
''Financial reporting''.  


A strong form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.
Under International Accounting Standards (IAS) the main accounting statements required to be presented.  


Under a make whole clause the borrower/issuer has to value the cash flows beyond the date of the early call/redemption at the government bond yield.


This potentially makes it prohibitively expensive for the issuer to take an early redemption.
These are:


The consequence of a make whole clause for the investor is that they can re-invest the redemption monies in government stock, thus preserving their originally expected cash inflows at lower risk.
* Statement of financial position.
* Income statement (which can be included in the statement of comprehensive income).
* Statement of comprehensive income.
* Statement of changes in equity.
* Statement of cash flows.




Make whole clauses are similar in their effect to Spens clauses.
The primary statements are supported by Notes providing additional and more detailed financial information.
 
Sometimes known as a make whole ''provision''.




== See also ==
== See also ==
* [[Call risk]]
* [[Income statement]]
* [[Clause]]
* [[International Accounting Standards]]
* [[Security]]
* [[Notes]]
* [[Spens clause]]
* [[Statement of cash flows]]
 
* [[Statement of changes in equity]]
[[Category:Accounting,_tax_and_regulation]]
* [[Statement of comprehensive income]]
[[Category:Corporate_financial_management]]
* [[Statement of financial position]]
* [[Statement of profit or loss and other comprehensive income]]

Revision as of 17:17, 19 December 2013

Financial reporting.

Under International Accounting Standards (IAS) the main accounting statements required to be presented.


These are:

  • Statement of financial position.
  • Income statement (which can be included in the statement of comprehensive income).
  • Statement of comprehensive income.
  • Statement of changes in equity.
  • Statement of cash flows.


The primary statements are supported by Notes providing additional and more detailed financial information.


See also

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