Best example of amortized cost

This is the best example of amortized cost I have ever seen , Thanks to Zhihu ！
Tell a story .
for instance , The enterprise issues a bond , What's the face value 1250 element , The coupon rate is 4.72%, The deadline is 5 year . In fact, the enterprise wants to raise 1250 yuan , But he found that if it was issued at his coupon rate , No one bought it . Later, the enterprise sold at a discount , sell 1000 element . Original value 1250 Yuan bonds , Sell now 1000 element , Sure enough, someone bought it cheaply . For example, Lao Wang bought one , Very happy , Tell people everywhere that it took 1000 Yuan 1250 Yuan thing , Make a 250 element .

By the end of the first year , Lao Wang received interest from the enterprise 59 element , Then his neighbor told him , Now the market interest rate is 10%, Yours 1000 If you take yuan for investment , Should have 100 Income of yuan , But now you only receive 59 element （1250X4.72%）, Still bad 41 Dollars? . Lao Wang was in a hurry , Go to enterprise theory , The enterprise said that now I have no money for you , that 41 I'll take it as if I borrowed it from you again . Lao Wang was too regretful , But there's no way , Who makes himself greedy for cheap . At the end of the first year , When Lao Wang kept his own account , Remind yourself of , I have lent it to them now 1041 It's a piece of money. .

End of the second year , Lao Wang calculates the investment income , Of course, use 1041 Let's calculate the principal of （1041X10%=104.1）, At this time, the enterprise still gave Lao Wang 59 Yuan , The poor 45 Yuan , Lao Wang went to the enterprise theory again , Enterprises still have no money , At this time, Lao Wang himself said , that 45 I'll take it as if I lent it to you . After go home , Lao Wang said hatefully , I have lent it to them 1086 It's a piece of money. （1041+45）.

Summer to autumn , Spring comes and summer goes , Time flies .

In the twinkling of an eye, at the end of the fifth year , The money borrowed by the enterprise is due , Lao Wang calculated , fuck , I just started to spend 1000 I bought a 1250 Yuan bond , I thought I found a big bargain , Who knows, in the end, I lent them a total of 1250 Yuan . At this time, the enterprise sent it to Lao Wang 1250 The principal and the last interest 59 element , He also gave Lao Wang a golden flag “ To help others 、 High moral character ”.

Now Lao Wang doesn't buy bonds anymore , I went to study accounting instead .

In the case , The principal of each period is the amortized cost , That's what 250 Yuan is allocated to each period . Because it was sold at the beginning 1250 No one bought it , Enterprises sell 1000, remainder 250 Allocated to each period , Finally, I can receive a total of 1250,. It can be understood in this way .

If it is issued at a premium , The same is true , I will stop making up stories .

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At your request , The following is an example of premium issuance .

Amortized cost ： Examples of premium issuance

such as , Enterprise issue 1000 Bonds with a face value of yuan , The coupon rate is 10%, But enterprises sell when they sell 1079 element . Lao Wang should have bad luck that day , Had a drink , Confused 1079 Yuan bought this face value 1000 Yuan bonds .

When you get home , Lao Wang thought something was wrong , Suddenly think of that bond , It's silly ,1000 Yuan of things spent 1079 Yuan , I've become a wrongdoer . I really want to cry without tears , stamp one 's feet and beat one 's breast 、 Look up at heaven and sigh deeply , I feel that the second half of my life will be destroyed .

Lao Wang has always been so unhappy , Until the end of the first year, something happened ------------

Celebrate the new year , The enterprise sent it to Lao Wang 100 Yuan interest . The neighbor saw , Say to Lao Wang , Now the market interest rate is 8%, Your that 1079 If you invest RMB , You can only earn 86.32 element （1079*8%）, Now they send you 100 element （1000*10%）, You earned more 13.68 Yuan ah . This sentence seems like a thunderbolt on a sunny day , A word awakens the dreamer , Lao Wang was so excited , Yeah, yeah , Ha ha ha ha , I spent more money at first 79 element , Now come back 13.68 yuan , I'm so happy .

Now Lao Wang is sober , The next year , Lao Wang counted himself , My capital in the first year is 1079 element , Come back at the end of the year 13.68 element , Then my capital in the next year is 1065.32 element （1079-13.68）, The market interest rate is 8%, It makes sense that if I invest this year , Can earn 85.23 element （1065.32*8%）. At this moment , The enterprise sent Lao Wang 100 Yuan interest , This time, Lao Wang has been very calm , Because I expected it long ago . Lao Wang is facing this 100 Yuan interest , Sighed , Say it's back 14.77 element （100-85.23） capital , Am I that 79 The total capital of yuan will come back bit by bit like this ？ If so , I didn't have to live or die , It's terrible to have no culture .

That's it , Spring comes and summer goes 、 Go to autumn 、 time flies like a shuttle .

In the twinkling of an eye, the end of the fifth year , The enterprise sent Lao Wang 100 RMB interest and 1000 Yuan principal . Lao Wang added so much before and after , Sure enough, there were many flowers 79 element , I come back one by one every year .

After these two purchases and sales of bonds （ The first time is discount issuance ）, Lao Wang finally put “ Amortized cost ” This concept is understood ： The so-called amortized cost , The difference between the initial purchase price and the nominal price , Make up for it bit by bit in the next year . Enterprises will not let you suffer , But it won't let you earn . No matter how much you spend on bonds （ Issue at a premium ） Or spend less （ Discount issue ）, Enterprises will pay more or less interest , Make up for the extra or less money you spend .



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The effective interest method calculates the actual income and amortized cost , Finally, the face value is just equal to the face value , How to prove ？ Who and how was it invented ？
Tell a story . for instance , The enterprise issues a bond , What's the face value 1250 element , The coupon rate is 4.72%, The deadline is 5 year . In fact, the enterprise wants to raise 1250 yuan , But he found that if it was issued at his coupon rate , No one bought it . Later, the enterprise sold at a discount , sell 1000 element . Original value 1250 Yuan bonds , Sell now 1000 element , Sure enough, someone bought it cheaply . For example, Lao Wang bought one , Very happy , Tell people everywhere that it took 1000 Yuan 1250 Yuan thing , Make a 250 element . By the end of the first year , Lao Wang received interest from the enterprise 59 element , Then his neighbor told him , Now the market interest rate is 10%, Yours 1…

Amortized cost of available for sale financial assets 、 Book value 、 fair value 、 What is the relationship between changes in fair value ？
This only explains “ Amortized cost ” The concept of . The following calculation and accounting treatment , Please refer to the answer upstairs , Write very well , I won't repeat . Example 1： Issue bonds at a discount ： for instance , The enterprise issues a bond , What's the face value 1250 element , The coupon rate is 4.72%, The deadline is 5 year . In fact, the enterprise wants to raise 1250 yuan , But he found that if it was issued at his coupon rate , No one bought it . Later, the enterprise sold at a discount , sell 1000 element . Original value 1250 Yuan bonds , Sell now 1000 element , Sure enough, someone bought it cheaply . For example, Lao Wang bought one , Very happy , Tell people everywhere that it took 1000 Yuan 1250 Yuan thing ,…