REVIEW QUESTIONS

Investment in Debt Securities

Answer the following questions:
1. What are the characteristics of a bond investment?
2. Based on IFRS 9, what are the classifications of investment in debt securities?
3. What is the business model and cash flow characteristics of a bond investment
for it to be classified as financial asset at amortized cost?
4. What is the initial measurement of investment in debt securities?
5. What is the difference between bond premium and bond discount?
6. What is the effect of amortizing bond premium and bond discount on interest
income?
7. Why is there a need to amortize discount or premium?
8. What are convertible bonds?
9. Based on IFRS 9, how do we reclassify bond investment at fair value to
amortized cost?
10. Based on IFRS 9, how do we reclassify bond investment at amortized cost to fair
value?

June 2012