Cash flow from Financing

[Ankit Sharma]

They say :- Principal Amount of debt issued as CFF inflow ,
If It is issued for premium then the premium amount will go to _____________?
If it is issued as Discount then from where the discount amount will come ______________?
Or we have to enter the net amount we receive?
Thanks

 

[S2000magician]

I’ve never seen this issue raised before.
I’d count the entire amount – principal plus any premium, or principal less any discount – as a CFF inflow.
It won’t appear on the CFA exam.

 

[Ankit Sharma]

Thanks for the confirmation
In Schweser It is written as Principal Amount of debt issued as CFF inflow. So just asked the doubt arised in my mind as I am very sensitive to the WORDS that are used . If in place of the word ‘Principal’ they would have used the word ‘Proceeds’ then there would not be any confusion.
Thnxx by the way

 

[S2000magician]

You’re quite welcome.