Minggu, 05 Desember 2010

Bernanke Defend Bond Buys

Decision Points















Federal Reserve Chairman Ben Bernanke is stepping up his defense of the Fed's $600 billion Treasury bond-purchase plan, saying the economy is still struggling to become "self-sustaining" without government help.
The Fed chairman said he thinks another recession is unlikely. But he warned that the economy could suffer a slowdown if persistently high unemployment dampens consumer spending. The interview is part of a broad counteroffensive Bernanke has been waging against critics of the bond purchase plan the Fed announced Nov. 3. The purchases are intended to lower long-term interest rates, lift stock prices and encourage more spending to boost the economy.
From news on which I get, here I only discuss the notion of bonds and accounting records when the bonds are carried as investments, bonds, according to wikipedia is a term used in the financial world is a statement from the issuer's debt to the bondholders and its promise to repay the capital and will be in the interest coupon due date of payment. Other provisions may also be included in the bond such as the identity of the bondholders, the limitations on legal action undertaken by the publisher. Bonds are generally issued for a fixed term of over 10 years. For example, in U.S. government bonds, called "U.S. Treasury securities" issued for a maturity of 10 years or more. The bond maturity of 1 to 10 years old called "fixed income" and debt under 1 year is called "Treasury Bills. In Indonesia, the debt maturity of 1 to 10 years issued by the government called the Government Securities (SUN) and the debt under 1 year issued by the government.
Bonds and stocks are both a financial instrument called security but the difference is that the owner of the shares is part of the owner of the company issuing shares, while bondholders are merely a lender or lenders to the issuer. Bonds also usually have a set long time where after a period of time expires then the bonds can be cashed in while the shares can be owned forever (with the exception of bonds issued by the British government called Gilts that do not have the maturity.


Above is a general knowledge about bonds. Well for him if the bonds  when done as an investment then the accounting treatment is recorded in the GL at cost plus expenses to get the bonds, in the presentation and reporting of financial bonds are divided into short-term investments or long term, short-term if the These investments are presented in current assets, while if the long term will be presented in non-current assets, but the above post fixed asset. For the assessment of the current bond assets are recorded at lower cost or whether  market price.

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