Difference between revisions of "Sinking fund"
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According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | ||
:[[Sinking fund]]. A fund that accumulates cash to pay off bonds when they are retired. | :[[Sinking fund]]. A fund that accumulates cash to pay off bonds when they are retired. | ||
| + | According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | ||
| + | :[[Sinking fund]]. Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: (1) the company can call in for redemption (at [[par value]]) a certain percentage of bonds each year; or (2) the company may buy the required amount of bonds on the open market. | ||
==Related concepts== | ==Related concepts== | ||
Latest revision as of 13:52, 28 October 2019
Sinking fund is a fund that accumulates cash to pay off bonds when they are retired.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Sinking fund. A fund that accumulates cash to pay off bonds when they are retired.
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Sinking fund. Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: (1) the company can call in for redemption (at par value) a certain percentage of bonds each year; or (2) the company may buy the required amount of bonds on the open market.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
