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Issuance of bonds and cash flow statement_http://24ivalue.com

Issuance of bonds and cash flow statement

Publication date: 2014-12-03 08:54:10

Although funding operations by means of bonds is one of the sources of external financing, and therefore cheaper, individuals do not always use it. Therefore, recognition of the issue of bonds in the cash flow statement is not common and can make a lot of problems.

The cash flow statement contains an entry related to issue of debt securities, which are recognized in the period received proceeds from the issuance of short-term and long-term debt securities at lower spending related to the issue.


Let us assume that an entity has issued two-year bonds with a nominal value of € 150 thousand, in the reporting period received an income from the sale of bonds in the amount of € 120 thousand.


The entity shall recognize the cash flow proceeds from the issue of debt securities in the amount of no at par (nominal) value but in the amount of actual proceeds of the bond issue - in our case is the amount of € 120 thousand (not € 150 thousand., which is the nominal value).


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