Minicase-8 Essay Example | Topics and Well Written Essays - 500 words

Minicase-8 - Essay Example However, under the ED, only those conversion options that â€Å"establish an ownership relationship will be classified as equity† (ED-FI, p. 4). This means that, once converted, the shares are not redeemable and that the holder bears the risk of the changes in the market value of the issuer’s shares of stock. If the option does not meet this criterion, the entire convertible bond will be classified as liability. Prior to the issuance of SFAS 145, the standard used to account for early extinguishment of debt was FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt. Under Statement No. 4, the gains or losses realized from the early settlement of debt should be shown as part of the company’s extraordinary items in its income statement. This classification is required regardless of the reason behind the early settlement. Under SFAS 145, gains or losses from early extinguishment of debt can now be classified as part of the income or loss from continuing operations in the income statement; provided that early extinguishments of debts are part of the recurring transactions for the issuer. However, if such early extinguishments of debts are unusual or are infrequent transactions, the gains or losses realized from such early extinguishments should still be classified as extraordinary items in the income statement. The change was made because FASB recognized that early payments of debt have become part of the risk management strategy of certain companies. Such transactions are now also viewed as recurring financing activities that an entity can utilize to manage its interest rate risk. FASB also thinks that this change is consistent with the definition of unusual or extraordinary transactions under APB Opinion No. 30 and will reduce the frequency of using the caption â€Å"extraordinary items† in t he income statement. The requirement of SFAS 145 related to the classification of gains or losses from early extinguishment of debt affects

Fundamental Assumptions of Psychoanalytic Theory Essay

Fundamental Assumptions of Psychoanalytic Theory - Essay Example Basic Instincts According to Freud’s psychoanalytic theory (Lauretis, 2008), the two basic instincts that drive all behavior are sex and aggression. He believed that people are mostly ignorant towards these motivating forces in themselves (Lauretis, 2008). For example, a boy who was mistreated by a bully, adapted his manners by following his behavior. By copying the aggressor, the boy alters himself from the individual who is threatened to the individual who is threatening others. For Freud, the basis of all human action is â€Å"psychic energy† (Humberto, 1969). Freud believed that this energy is a restricted resource because â€Å"directing this energy into one activity prevented it from being used in another† (Loker, 2006). Therefore, a person who uses lots of energy venting anger on his or her spouse will have slight or no energy to spare for the wants of his or her kids. The two basic instincts that stimulate or boost psychic energy, Freud called ‘libi do’ and the ‘death instinct’ or the ‘drive to aggression’. In his initial work, Freud believed that the two basic instincts or drives were self-continuation (or continued existence) and species-continuation. The need to save the species was mentioned in the sex drive. Although, later on he combined these two views - continuation of self and of species - into ‘libido’ as the single source including both types of drive. Unconscious Motivation Unconscious motivation plays a major role in Sigmund Freud's psychoanalytic theory. In accordance with this theory, most human behavior is the outcome of needs, wishes, and recollections that have been suppressed into an unconscious condition, however, it still control actions. Freud thought that the human psyche is made of a small, conscious part that is accessible for direct observation and a much bigger subconscious part that has an even more vital part in shaping behavior (Horney, 2000). The mind is similar to an iceberg and only a small portion is exposed to conscious understanding, whereas the bigger, deeper bases for human actions lie under the surface. Example of unconscious motivation is when someone is incapable to stay in a continuing relationship and always gets a basis to end his associations. He may claim that there is a normal reason for ending a relation, although his behavior may actually be the result of an â€Å"unconscious need for affection and belongingness, and an overpowering fear of rejection. In his heart, he wishes and wants to be in a caring bond; however, he finds reasons to end the relationship to avoid being rejected† (MacIntyre, 2004). The view of unconscious motivation was included into Freud’s psychoanalytic theory only after testing it technically as well as medically. He insistently stated that unconscious procedures, which direct human behavior, could be identified by special methods developed by psychoanalysts (Molino, 2004). P sychic Determinism Everything that takes place in someone’s mind and everything someone does has a particular, exclusive reason namely psychic determinism. Psychoanalysis has no space for wonders, upsets or independence. All apparent inconsistencies of psyche as well as behavior can be determined; nothing is unintentional, for example, it is not accidental when a person fails to remember someone’