Liabilities note form

Just as structures are termed synthetic if the assets are CDSs instead of cash instruments, so they are unfunded if the liabilities are swaps but funded to the extent the liabilities are in note form. 

The remaining vaccinia vaccine licensed in the United States (Dryvax, manufactured by Wyeth, Philadelphia, Pa.) is a live, infectious virus prepared from calf lymph. Like all smallpox vaccines that were marketed in the United States, it derived from the NYCBOH strain and contains 108 plaque-forming units per milliliter. Current vaccinia vaccine stocks (> 12 million doses) are held by the CDC. It must be noted that the potency of several lots of this lyophilized vaccine has fallen. Pharmaceutical companies in the United States lack interest in manufacturing new lots of vaccine, owing to the absence of a profitable retail market, antiquation of calf-lymph production techniques and facilities, and the manufacturer s legal liability for vaccination complications. 

The second part of the balance sheet in Table 16.3 lists the liabilities and stockholders equity. Current liabilities include all payments that must be made by the company within one year. The total for U.S. Chemicals is 4,153,(XX),0(X). Long-term debts, often in the form of bonds, are due after more than one year from the date of the balance sheet. They total 3,943,(XX),000. Other noncurrent liabilities total 1,754,(XX),(XX) and include pension and other postretirement benefits as well as reserves for any company operations that are discontinued. Total liabilities are 9,850,000,000. We note that liabilities are less than assets by 4,361,(XX),0(X). Thus, by Eq. (16.1), this difference must be the stockholders equity. This equity includes the par value of issued common stock, which totals 1,(XK),000,(X)0. The par value of a share of stock is an arbitrary amount that has no relationship to the market value of the stock, but is used to determine the amount credited to the stock account. If the stock is issued for more than its par value, the excess is credited to the account shown as capital in excess of par value. In Table 16.3, the par value is 1.00 per share but the stock was issued at 4.23 per share. Companies frequently repurchase shares of their common stock, resulting in a reduction of stockholders equity. Because the shares are placed in a treasury, the transaction appears as treasury stock at cost. In Table 16.3, that amount is 3,428,000,000. The other account under stockholders equity is retained earnings, which is the accumulated retained earnings that is increased each year by net income. Tte amount of this entry must be such that Eq. (16.1) is satisfied. This is seen to be tte case in Table 16.3, where the net stockholders equity is 4,361,000,000, giving total liabilities plus stockholders equity as 14,211,000,000, which is equal to total assets. 

After citing examples of circumstances in which the entry-level professional should know some legal fundamentals, the chapter explains selected legal terms and notes the increased tendency to initiate legal actions. Three ways in which liability is incurred are explained followed by examples of failures and lessons learned from them. The chapter discusses ways to minimize liability including liability insurance, organizational preventive practices, and personal preventive practices. An admonition to keep liabihty minimization in perspective follows and the chapter concludes with an introduction to the legal forms of business. 

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