The Accountancy of Investment, Including a Treatise on Compound Interest, Annuities, Amortisation, and the Valuation of Securities

The Accountancy of Investment, Including a Treatise on Compound Interest, Annuities, Amortisation, and the Valuation of Securities

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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1904 edition. Excerpt: ...on bonds still held as has not yet been absorbed in the process of amortisation. This carrying of a dead value, which is somewhat artificial, necessitates the carrying, also, of an artificial annulling or offsetting account, the sole function of which is to express this departed value. We may call this credit account 'Amortisation Fund." It is analogous to Depreciation and Reserve Funds. The part of the premiums which has been extinguished by the Amortisation Fund may be designated as ' Premiums Amortised," or "Ineffectiv Premiums," while the live premiums may be styled ' Effectiv Premiums, ' being what in Art. 177 we called simply ' Premiums.' A double operation takes place in these accounts: first, the absorption of effectiv premiums by lapse of time; and second, the rejection of ineffectiv premiums upon redemption or sale. 181.--There are two ways of carrying on these accounts, differing as to Premiums. We may keep two accounts: "Effectiv Premiums" and "Amortised Premiums," or we may combine these in one, ' Premiums at Cost.' The entire scheme will be: a. Bonds at Par. b. Premiums at Cost. e. Amortisation Fund. or, a. Bonds at Par. c. Effectiv Premiums. d. Amortised Premiums. e. Amortisation Fund. "a" will in both schemes be the same; "e" will also be the same, "b" is the sum, c+d. In the former, the cost is a+b, while the book value is a+b--e. In the latter the book value is a+c, while the cost is a+c+d. The former gives the cost more readily than the latter, and the book value less readily. The former might be considered the more suitable for a trustee; the latter, for an investor. 182.--Account a, Bonds at Par, is debited for par value of purchases and credited for par...show more

Product details

  • Paperback | 42 pages
  • 189 x 246 x 2mm | 95g
  • Rarebooksclub.com
  • Miami Fl, United States
  • English
  • Illustrations, black and white
  • 1236634098
  • 9781236634092