A bond sinking fund is reported in the section of the balance sheet immediately after the current assets. The bond sinking fund is part of the long-term asset section that usually has the heading "Investments." The bond sinking fund is a long-term (noncurrent) asset even if the fund contains only cash. The reason is the cash in the fund must be used to retire bonds, which are long-term liabilities. In other words, because the money in the bond sinking fund cannot be used to pay current liabilities, it must be reported outside of the working capital section of the balance sheet. (Working capital is current assets minus current liabilities.)
marketable securities
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A bond sinking fund is a restricted asset of a corporation that was required to set aside money for redeeming or buying back some of its bonds payable.
example of sinking fund
A sinking fund has a very important purpose. The purpose of a sinking fund is to reduce the amount of debt by repaying or purchasing outstanding loan amounts.
Debit fund balance and credit encumrances because the reserve for encumbrances need not be closed because it is a balance sheet account.
A provision on a bond that provides for the systematic retirement of the bond prior to maturity is known as a sinking fund provision. This provision requires the issuer to set aside funds on a regular basis to repay a portion of the bond issue before it matures, reducing the overall debt burden.
General reserves are part of profit of the company for usable in future so it is the liability of company and shown in liability side of balance sheet.
future value of an annuity is a reciprocal of a sinking fund
balance sheet profit&loss account cash flow statement fund flow statement
A balanced fund offers the combination of a stock component, bond component and sometimes a money market component. These things combined balance out the portfolio.
Sinking fund method for depreciation The straight line method has equal annual depreciation for every year. There are other methods which has more depreciation allocated to the earlier years like Written-Down Value (WDV) method in which depreciation is charged at fixed rate (%) on the reducing balance (i.e. cost less depreciation) every year. The sinking fund method allocates more depreciation to the later years. The depreciation for the first year equals the annual deposit needed for a sinking fund to accumulate at the given rate to an amount that equals the depreciation base. For each consecutive year, the annual depreciation equals the annual sinking fund deposit plus the interest earned on the fund up to that year.