In Its 2016 Annual Report to Shareholders,Bare Sturns Group Inc

question 141

Essay

In its 2016 annual report to shareholders,Bare Sturns Group Inc.disclosed the following:
On October 28,2016,the Company issued $475,000,000 aggregate principal amount of 9-1/4% Senior Notes Due 2021 ("Senior Notes")and $618,670,000 aggregate principal amount at maturity of 10-1/4% Senior Discount Notes Due 2021 ("Senior Discount Notes" and collectively the "Notes")in a transaction not registered under the Securities Act in reliance upon an exemption from the registration requirements of the Securities Act.Gross proceeds from the offering amounted to $850,000,000.The discount on the Senior Discount Notes is being accreted under the effective interest method.
Explain the last sentence of the disclosure to clarify what accounting was necessary and why.

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Definitions:

Informal Report

A less structured report, often shorter and used for internal purposes, to communicate within an organization without strict adherence to formalities.

Survey Results

The data or outcomes gathered from the administration of a questionnaire to a sample of respondents.

Feasibility Report

A study conducted to assess the practicality and potential success of a proposed project or system.

External Accounting

The process of handling financial records and reports for parties outside an organization, such as regulators or investors.