Why is discount on issue of debentures is an asset to the company?
Video Details
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P1 - Advanced Accounting (New) - Without AS
AS 3 Cash Flow Statement
#8. CF from Financing Activity - Ill - 3
Niveta Rajkumar
CA Inter
★ 3K+
17-Jul-24 18:22
98
Answers (2)
See, when the liability (debentures) is undertaken at a lower value in order to counter the reduction an asset is required which is discount on debentures which is a fictitious asset
Upashya Das
CA Final
★ 2K+
17-Jul-24 22:41
Discount on issue of debentures is a cost that the company has incurred for the debentures issue. The benefit is available over a period of time. So the discount is recorded as a fictitious asset and written off over the debenture tenure.