Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: Consolidation (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
optimistCPA
Major Contributor
Major Contributor


Joined: 03 Mar 2009
Online Status: Offline
Posts: 360
Posted: 23 Aug 2009 at 23:16 | IP Logged  

What is the difference between direct out of pocket
expenses (which are debited) (as in case of investment in
sub.) and Bond issue costs (which are capitalized)?

I thought bond issue costs are also legal fees etc. Then if
that is true then which one is capitalized and which one is
expensed.

Thanks always.

__________________
BEC--80
REG--95
FAR--77
AUD--82
Back to Top View optimistCPA's Profile Search for other posts by optimistCPA
 
Jams
Major Contributor
Major Contributor


Joined: 26 Apr 2007
Location: United States
Online Status: Offline
Posts: 547
Posted: 23 Aug 2009 at 23:39 | IP Logged  

i think direct issue costs are expensed now in new rule of 141R and not increase to investment account. direct cost have the same meaning only treatment is different for debt and equity. for debt they are capitalize and amortize over the life of bond, and for equity they are expensed (used to increase investment earlier). and of course the registration costs rules are not changed which is-they still reduce "APIC". 

__________________
jams

BEC-76
AUD-80
REG-84
FAR-81 !!!
Back to Top View Jams's Profile Search for other posts by Jams
 
optimistCPA
Major Contributor
Major Contributor


Joined: 03 Mar 2009
Online Status: Offline
Posts: 360
Posted: 23 Aug 2009 at 23:51 | IP Logged  

So, direct expenses related to equity are expensed and
exps. related to debt are capitalized.

Thanks Jams.

__________________
BEC--80
REG--95
FAR--77
AUD--82
Back to Top View optimistCPA's Profile Search for other posts by optimistCPA
 
Jams
Major Contributor
Major Contributor


Joined: 26 Apr 2007
Location: United States
Online Status: Offline
Posts: 547
Posted: 24 Aug 2009 at 09:06 | IP Logged  

yep. but only for the new rules, not for the old ones, old rule says "add to investment account". in case the exam has some old questions. good luck. 

__________________
jams

BEC-76
AUD-80
REG-84
FAR-81 !!!
Back to Top View Jams's Profile Search for other posts by Jams
 
bird
Regular
Regular


Joined: 22 Aug 2009
Location: United States
Online Status: Offline
Posts: 208
Posted: 24 Aug 2009 at 10:52 | IP Logged  

bond issue costs will most likley be specifically identified in the question.

It seems like the examiners want to make sure you know the treatment of bic more than anything else.

Back to Top View bird's Profile Search for other posts by bird
 




Page of 2 Next >>
  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.0938 seconds.

Copyright © 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote