Bond Fair Value Option, International

Question 1

What’s the result of using the Fair Value Option?

Answer 1

-Certain financial assets and liabilities reported at FV with unrealized gains/losses reported in earnings

Question 2

How is change in FV reported on Balance Sheet?

Answer 2

-Is adjunct or contra account

Question 3

What’s the major difference between GAAP and IFRS in bond accounting?

Answer 3

-IFRS always requires effective interest method and amortization period is expected term of bond as opposed to contractual period per US standards