Intercompany Profit Transactions-Bonds

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1 Intercompany Profit Transactions-Bonds
Chapter 7 Intercompany Profit Transactions-Bonds

2 Introduction p239 A decision to borrow from or loan directly to affiliates is really only a decision to transfer funds among affiliates. 母子公司間的借貸可以視為在連屬企業間的資金流動 Direct loans among affiliates produce reciprocal receivable and payable accounts for principal and interest, as well as reciprocal income and expense accounts. 母子公司間之借貸會產生相對應的本金及利息相關的應 收及應付科目以及相對應的收入費用項目 Companies eliminate these reciprocal accounts in preparing consolidated financial statements 這些相對應的科目在編制合併報表時必須消除

3 Constructive Gains and Losses on Intercompany Bonds 推定收回公司債損益 p240
If the price paid by one affiliate to acquire the debt of another is greater (less) than the book value of the liability (par value plus unamortized premium or less unamortized discount and issuance costs), a constructive loss (gain) on the retirement of debt occurs. 如果連屬企業買另一連屬企業的債券付出的價錢大 於(小於)該債券的帳面價值,對合併個體來說,會產 生推定收回損失(利得)

4 Constructive Gains and Losses on Intercompany Bonds 推定收回公司債損益 p240
Constructive gains and losses on bonds are (1) realized gains and losses from the consolidated viewpoint 從合併個體來看 (2) that arise when a company purchases the bonds of an affiliate 購買連屬企業的債券 (3) from other entities 從第三方購買 (4) at a price other than the book value of the bonds. 購買價格不等於債券面額 =>No gains or losses result from the purchase of an affiliate’s bonds at book value or from direct lending and borrowing between affiliates.

5 推定收回損益之認列- Par value theory 面額法 p240
P pays $99,000 for $100,000 par of S’s outstanding bonds with $2,000 unamortized premium =>they would allocate the $3,000 constructive gain ($102,000 less $99,000) $1,000 to P and $2,000 to S. 推定收回公司債損益中帳面金額與面額間之差額 由發行公司負擔；面額與買價間之差額則由購買 公司負擔

6 Par value theory 面額法 p240

7 推定收回損益之認列- Agency theory 代理法 p241
Agency theory assigns the $3,000 constructive gain to the subsidiary (the issuer), and the consolidated statement effect is the same as if the subsidiary had purchased its own bonds for $99,000 under which the affiliate that purchases the intercompany bonds acts as agent for the issuer, under directions from Parent management. 代理法認為公司債之推定收回與發行公司自己收回公 司債之結果無異，全部推定收回公司債損益均應由發 行公司自己負擔。

8 Agency theory 代理法 p241

9 Par value theory 面額法 vs Agency theory 代理法 p241
Changes in market interest rates generate gains and losses for the issuer, so accounting procedures should assign such gains and losses to the issuer, irrespective of the form of the transaction (direct retirement by the issuer or purchase by an affiliate). the agency theory is conceptually superior, and, accordingly, we assign constructive gains and losses to the issuer in this book. 本章後續關於推定收回損益之討論均以代理法為準。

10 In this chapter…. Straight-line 放便教學,舉例時使用直線法
rather than effective interest amortization of premiums and discounts is used in the illustrations 事實上,有效利率法較正確 課本先簡介推定損益的概念及基本會計處理,後 半部在詳細介紹會計處理

11 Subsidiary Acquisition of Parent Bonds 子公司購回母公司債券 p241
P->S 80%, P issues $1,000,000 par of 10 %, 10-year bonds at par value to the public on 12/30, 2010. On 12/31, 2011, S purchases $100,000 of the bonds for $104,500 in the open market. S’s purchase results in the constructive retirement of $100,000 of Pat bonds and a constructive loss of $4,500

12 Subsidiary Acquisition of Parent Bonds-Equity Method 子公司購回母公司債券-權益法
P adjusts investment income and investment accounts at 12/31 to record the constructive loss under the equity method. 關於推定損失,母公司需調整投資損益

13 Subsidiary Acquisition of Parent Bonds- Workpaper 子公司購回母公司債券-合併報表 p241
The $4,500 constructive loss appears in the consolidated income statement of P and S for 2011, and the 10% bond issue is reported at $900,000 in the consolidated balance sheet at 12/31, 2011 合併報表有推定損失4,500;且P之公司債剩下 $900,000($10,000,000-$1,000,000)

14 Parent Acquisition of Subsidiary Bonds 母公司購回子公司債券 p242
S sold $1,000,000 par of 10%, 10-year bonds to the public at par on 12/30, 2010 P acquires $100,000 par of these bonds for $104,500 on 12/31, 2011, in the open market. The purchase by P results in a constructive retirement of $100,000 par of S bonds and a constructive loss of $4,500 to the consolidated entity.

15 Parent Acquisition of Subsidiary Bonds 母公司購回子公司債券 p242
We assign only 80% of the constructive loss to controlling stockholders because the purchase of subsidiary bonds is equivalent to an upstream sale, in which the intercompany transactions affect noncontrolling interest share. 母公司購回子公司債券,性質為逆流交易,對於母公 司(控制權益)來說,我們只要處理其持有之股份的部 分;另一方面,關於非控制權益,我們也應該依其持股 比例進行調整

16 Parent Acquisition of Subsidiary Bonds-Equity Method 母公司購回子公司債券-權益法 p242
$4,500x80%=$3,600

17 Parent Acquisition of Subsidiary Bonds-Workpaper 母公司購回子公司債券-合併報表 p242
此合併工作底稿分錄與順流交易一樣,但須注意非 控制權益及其投資收益金額會有所不同,對合併淨 利的影響也會不同

18 Parent bonds purchased by subsidiary 子公司購買母公司公司債 p242
A constructive retirement of parent bonds occurs when an affiliate purchases the outstanding bonds of the parent. 推定損益發生之情形 The purchaser records the amount paid as an investment in bonds. This is the only entry made by either the purchaser or the issuer at the time of the intercompany purchase. 買方帳上記投資公司債及其金額,這是公司債內部 交易裡,在買賣當天唯一的分錄

19 Parent bonds purchased by subsidiary 子公司購買母公司公司債
The separate accounts of the affiliates do not record any gain or loss that results from the constructive retirement, although it is included in investment income on the parent’s books under the equity method. 母子公司個別帳上分錄不會有關於推定利得的分錄, 但母公司投資及投資收益項目必須調整 The difference between the bond liability and bond investment accounts on the books of the parent and subsidiary reflects the constructive gain or loss. 賣方之賣出之公司債帳面金額與買方投資公司債金 額之差額即推定損益

20 Parent bonds purchased by subsidiary 子公司購買母公司公司債 p242
S is a 70 %-owned subsidiary of P (FV= MV $6,300,000)on 12/31, 2011 P has $10,000,000 par of 10% bonds outstanding with a $100,000 unamortized premium on 1/2, 2012, at which time S purchases $1,000,000 par of these bonds for $950,000 from an investment broker.

21 Parent bonds purchased by subsidiary 子公司購買母公司公司債 p242
推定損益之計算 子公司(買方)購買時個別帳上分錄

22 Parent bonds purchased by subsidiary 子公司購買母公司公司債-母公司 p243

23 Parent bonds purchased by subsidiary 子公司購買母公司公司債-子公司 p243
子公司個別帳上(計息\計息\攤銷購買折價為利息收 入)

24 Parent bonds purchased by subsidiary 子公司購買母公司公司債 p243
Ending Balance 母子公司個別帳上餘額

25 母公司投資收益之計算 首先加上債券內部交易時產生之推定損益,
Parent bonds purchased by subsidiary-Equity Method 子公司購買母公司公司債-權益法 p244 母公司投資收益之計算 首先加上債券內部交易時產生之推定損益, 期末時,做逐步調整,調整的理由為母子公司個別帳 上經由折溢價的攤銷已經逐步認列了部分推定損益, 關於這部分,我們就由投資收益已認列的推定損益 部分扣回來

26 Parent bonds purchased by subsidiary-Equity Method 子公司購買母公司公司債-權益法 p244
認列70%子公司淨利 調整認列推定債券100%收回利得 調整已在母子公司個別帳上間接認列推定債券利得

27 Note 推定收回損益可看做是由母公司發行債券溢價部 分(比帳面值高的部分)加上子公司購得母公司債 券之折價部分(比帳面值低的部分)所構成。
隨著時間經過,此溢價的攤銷逐年被認列為母公 司的利息費用減少(可視為一種利得);此折價的攤 銷逐年被認列為子公司的利息收入。 待債券到期,則自從內部債券交易發生起,之溢價 攤銷總額加上折價攤銷總額即為推定收回損益之 金額

28 Note 由上述可知,既然隨著時間經過,母子公司已逐年 認列推定收回損益,因此在內部交易發生當年,母 公司在權益法投資收益項目對於推定收回損益 之認列,我們必須隨著時間經過再做調整(逐年扣 除)

29 沖銷期初母公司發行債券(被子公司購買部分)與 子公司之投資母公司公司債及認列推定收回利得
Parent bonds purchased by subsidiary- Workpaper immediately after buying the bonds p243 沖銷期初母公司發行債券(被子公司購買部分)與 子公司之投資母公司公司債及認列推定收回利得

30 Parent bonds purchased by subsidiary- Workpaper at reporting date p244
沖銷期末母公司發行債券帳面值(被子公司購買部分)與子 公司之投資母公司公司債及認列推定收回利得 沖銷期末母公司發行債券之利息費用 (被子公司購買部分) 與子公司之投資母公司公司債之利息收入及認列推定利得

31 Parent bonds purchased by subsidiary- Workpaper at reporting date p248/p250
母公司投資收益的計算: $220,000x70%+$60,000-$12,000=$202,000 將投資還原至期初 非控制權益收益的計算： $220,000x30%=$66,000

32 Parent bonds purchased by subsidiary- Workpaper at reporting date p248/p250
對沖 沖銷相對應科目

33 Effect on Consolidated Statements in Subsequent Years(Downstream)-Equity Method p246
調整已在母子公司個別帳上間接認列之推定收回債券利得

34 Combining Workpaper entry
Effect on Consolidated Statements in Subsequent YearsDownstream-Workpaper p251 Combining Workpaper entry

35 Investment in Pam bonds 970
Effect on Consolidated Statements in Subsequent Years(Downstream)- Wokpaper 沖銷期末母公司發行債券帳面值(被子公司購買部分)與子公司 之投資母公司公司債及將投資子公司金額調低,使之能與子公 司權益對沖 沖銷期末母公司發行債券之利息費用 (被子公司購買部分)與子 公司之投資公司公司債支利息收入及將投資子公司金額調低, 使之能與子公司權益對沖;(36,000+12,000)為期初子公司權益 (母公司持股部分)和母公司投資金額的差異 10% bonds payable ,006 Investment in Pam bonds Investment in Sue Interest income Interest expense Investment in Sue

36 Effect on Consolidated Statements in Subsequent Years(Downstream)- Wokpaper
將相對應科目對沖 Interest payable Interest receivable

37 Effect on Consolidated Statements in Subsequent Years 247

38 Subsidiary bonds purchased by parent 母公司購買子公司債券 p248
P owns 90% of S. P purchased its interest in S a number of years ago at its book value of $9,225, ($10,000,000+$250,000)* 90% on the acquisition (1) At 12/ 31, 2011, S had $10,000,000 par of 10% with an unamortized discount of $300,000. (2) Pay interest on 1/1 and 7/1 of each year (3) mature in five years on 1/1, 2017.

39 Subsidiary bonds purchased by parent 母公司購買子公司債券 p248
On 1/ 2, 2012, P buy 50% of S’s bonds for $5,150,000 cash and classifies the bonds as a held-to-maturity investment. B. This is a constructive retirement and results in a loss of $300,000 from the viewpoint of the consolidated entity. =>$5,150,000- $4,850,000 (50% of the $9,700,000 book value of the bonds) = $300,000 C. We assign the loss to S under the theory that the P acts as agent for S, the issuer, in all intercompany transactions.

40 Subsidiary bonds purchased by parent 母公司購買子公司債券 p248
During 2012, S records interest expense on the bonds of $1,060,000 [($10,000,000 par *10%) + $60,000 discount amortization]. Of this interest expense, $530,000 relates to the intercompany bonds. P records interest income from its investment in bonds during 2010 of $470,000 [($5,000,000 par * 10%) - $30,000 premium amortization]. The $60,000 difference between the interest expense and the income on the intercompany bonds reflects recognition of one-fifth of the constructive loss during 2012.

41 Subsidiary bonds purchased by parent 母公司購買子公司債券-權益法 p248
認列 90%的子公司淨利

42 Subsidiary bonds purchased by parent 母公司購買子公司債券-權益法 p248
認列90%的子公司債券推定收回損失 調整投資損益,由於母子公司個別帳上已逐步認 列推定收回損失

43 Subsidiary bonds purchased by parent 母公司購買子公司債券-權益法 p249
投資餘額 Because $5,000,000 par of S bonds have been constructively retired, the consolidated balance sheet reports bonds payable of $4,880,000 ($5,000,000 par less the unamortized discount of $120,000) related to the bonds held outside of the consolidated entity. 合併報表流通在外公司債餘額 $4,880,000

44 Subsidiary bonds purchased by parent- Effect of constructive loss on noncontrolling interest share and consolidated net income p249 Noncontrolling interest share for 2012 is $51,000 [($750,000 − $300,000 + $60,000) × 10%]. Effect of constructive loss on consolidated net income

45 Combining Workpaper entry
Subsidiary bonds purchased by parent -Consolidated Workpaper entries 母公司購買子公司債券-合併報表 p249 Combining Workpaper entry

46 沖銷期末子公司發行債券帳面值(被母公司購買部分)與母公司之投資子公司公司債及認列推定損失
Subsidiary bonds purchased by parent -Consolidated Workpaper entries 母公司購買子公司債券-合併報表 p249 沖銷期末子公司發行債券帳面值(被母公司購買部分)與母公司之投資子公司公司債及認列推定損失 沖銷期末子公司發行債券之利息費用 (被母公司購買部分)與母公司之投資子公司公司債之利息收入及認列推定損失 Loss on retirement of bonds 10% bonds payable ,880 Investment in Sky bonds ,120 Loss on retirement of bonds Interest income Interest expense

47 Subsidiary bonds purchased by parent -Consolidated Workpaper entries 母公司購買子公司債券-合併報表 p249
相對應科目對沖 Interest payable 250 Interest receivable 250

48 Combining Workpaper entry
Effect on Consolidated Statements in Subsequent Years 母公司購買子公司債券-之後年度合併報表 p251 Combining Workpaper entry

49 Effect on Consolidated Statements in Subsequent Years 母公司購買子公司債券-之後年度合併報表 p251
沖銷期末子公司發行債券帳面值(被母公司購買部分)與母公 司之投資子公司公司債及將投資子公司金額調高,使之能與 子公司權益對沖,調低非控制權益(既然與子公司權益對沖時 所產生的非控制權益並未包含此部分) Investment in Sky Noncontrolling interest 10% bonds payable ,910 Investment in Sky bonds ,090

50 Effect on Consolidated Statements in Subsequent Years 母公司購買子公司債券-之後年度合併報表 p251
沖銷期末子公司發行債券之利息費用 (被母公司購買部分) 與母公司之投資公司公司債之利息收入及將投資子公司金 額調高,使之能與子公司權益對沖;調低非控制權益(既然與 子公司權益對沖時所產生的非控制權益並未包含此部分) Investment in Sky Noncontrolling interest Interest income Interest expense

51 Effect on Consolidated Statements in Subsequent Years 對合併淨利之影響 p251

52 Effect on Consolidated Statements in Subsequent Years p256