In Its 2013 Annual Report to Shareholders, Bare Sturns Group

question 16

Essay

In its 2013 annual report to shareholders, Bare Sturns Group Inc. disclosed the following:
On October 28, 2013, the Company issued $475,000,000 aggregate principal amount of 9-1/4% Senior Notes Due 2018 ("Senior Notes") and $618,670,000 aggregate principal amount at maturity of 10-1/4% Senior Discount Notes Due 2018 ("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:

Production Manager

A professional responsible for overseeing the production process within a manufacturing facility, ensuring that goods are produced efficiently, safely, and meet quality standards.

Responsibility Centre

A unit within an organization, such as a department or division, whose manager is accountable for specific financial and operational outcomes.

Controllable

Refers to costs or factors within a business that can be managed or influenced by decisions made by the company.

Uncontrollable

A term referring to factors or costs that cannot be directly controlled or influenced by decisions in the short term.