Fall 2017 #9
In this problem, Change in Surplus Notes was included in the calculation for Statutory Net income. Which piece of Direct Charges to Surplus does this come from:
--> other surplus changes (includes 6 separate items, 4 of which came up in the previous exam problem.)
-->additional capital contributions
-->stockholder dividends
I'm assuming not SH Divs, but Surplus notes doesn't seem to be in the list of Other Surplus Charges?
Comments
Okay, as I relate it to IRIS 8: Change in Adj PHS, the Change in Adj PHS = (Change in PHS - Change in Surplus Notes - Capital Paid in - Surplus Paid in), so it seems like this is part of Additional Capital Contributions. Correct me if I'm wrong
Yes! That's an astute observation. (It's not really clear from chapter 9 of Odomirok, but the IRIS 8 formula makes it explicit.)
Also, check the pdf solution for this problem in the wiki. (It shows there that surplus notes is part of additional capital contributions.)
Ooops, I missed that there in your solution! Thanks so much!