Hello and welcome to the Burlington Mayor's Show for the month of January 2023. I am excited to be back in the studios and I'm excited to have with me today Darren Springer, who is the general manager of the Burlington Electric Department and the two of us are going to talk about all things Net Zero, this major goal that the city has set. We started establishing this goal back in 2016, a couple years after we met our last major environmental goal, which was to become the first, we didn't actually set up to be on the first city, but we were the first city that sourced 100% of our electricity from renewable sources. After doing dozens of interviews on that and realizing how powerful setting that ambitious vision had been, in 2016 we consolidated around this idea of becoming a net zero energy city by 2030 and in 2019 we released a very detailed roadmap that laid out the strategies for getting us there and here we are now in 2023. It's been kind of remarkable, I think it's four years since we were by the end, I think it was late in the year in 2019, so it will be four years at the end of this year since we released this plan. We have taken a number of the actions that were laid out in that plan. We are making progress towards that numerical goal and this week, this town meeting day, Burlington voters have again an opportunity to take a really meaningful step in that direction with the passage of a ballot question that will implement the charter change essentially that Burlington supported a couple of years ago on town meeting day by about 65% of voters voted to give the city the authority to regulate heating systems and then it took a year, but the legislature passed this last year. We are now ready to go back to the voters and actually lay out a essentially a new ordinance for people to approve that will really give us more ability to make progress towards this goal for the first time. So Darren and I are going to talk, we're going to start at least by talking about this, this thermal heating and carbon pollution impact fee. Why don't I turn it over to you, Darren, maybe you could summarize for people what they're going to be voting on. Absolutely, thank you mayor. It is exciting to be thinking about all the progress that we've made with net zero just in the last several years. We have launched dozens of incentive programs. We've implemented in the city a number of meaningful policies, including rental weatherization standards and requirements for new construction to be heated with renewable energy. And now this town meeting day is really the culmination of several years of work starting back in October of 2020 with a proposal that you had laid out that focused on how do we electrify the heating and thermal uses in buildings in Burlington. That led to the charter change discussion, the vote in 2021 to pass a charter change action in 2022 from the legislature and the governor to give Burlington the authority under the charter change. And then over the last six plus months, our department and the department of permitting and inspections has been working to bring forward a policy proposal that includes a carbon pollution impact fee as part of fairly ambitious new policies that if approved by voters on town meeting day, the idea would be the city council could come back and draft an ordinance. And the goal, the main goal here is that starting in 2024, all new construction is 100% renewable or if they are using any fossil fuel systems, there's a carbon pollution impact fee that accounts for the impact on the environment and on health from using those fossil fuels and similar requirements for large existing buildings over 50,000 square feet when they're replacing a heating system or water heating system. And critically, it's important to mention what's not included here because I think sometimes folks can get confused with all the details that are out there. This does not affect existing residential buildings, does not affect single family homes or, you know, apartments or condos or affordable housing. It does not affect small businesses. This is really about the largest buildings in the city currently and new construction as well as city buildings where we can lead by example as well. Great. Maybe I know you have some slides here. Maybe we should get into a few of the details that really I think you've done these analyses that really speak to really the only concern I think or the main concern I've heard about this is some people say, isn't this going to make housing? Isn't this going to make starting new businesses in Burlington more expensive? It's already expensive to build here. You know, understand we got to do something about climate, but isn't this going to make that issue worse? We've really grappled with that question and the results I think are not intuitive. Maybe you can walk us through a couple of those examples. Absolutely. So I'm going to jump ahead a few slides here to some of the analysis that you were referencing. And Burlington Electric worked on this analysis using real buildings in the city. These are real examples where we had data and we worked with a national group of experts from the Building Electrification Institute to come up with this. And what we see here is 150,000 square foot example of a new multifamily building. So this is a significantly large building, new multifamily building in the city. And the gray bars represent on the farthest left a baseline fossil fuel heating and water heating system. And then the darker gray bar represents that system with the carbon fee applied in the scenario where the carbon fee would be applied. And all of the green bars here represent renewable systems. We're talking about using renewable fuels or using electric heat pump or ground source heat pump technologies. And the interesting thing here is that, especially with the carbon fee included, every single renewable option is cost competitive. But even without the carbon fee, a number of the renewable systems are cheaper than putting in a fossil fuel system when we think about the upfront costs. And that's I think a relatively new development. These technologies have been coming along for a number of years. We're seeing more and more buildings in the city, even before this requirement is fully in place, embrace these technologies, including Hula where we were yesterday, which is 100% heated and cooled with geothermal ground source heat pumps. When you look at these analyses, you almost wonder, wow, gosh, why do we even need a fee given this? But here's one of the for me, one of the reasons why this is important is I think to have that, in this case, what appears to have been about almost exactly a $600,000 fee for this building, that is a significant expense for a developer. Having been a housing developer in the past, looking at that kind of expense, if going through a permitting process and being kind of confronted with that, that I think is really kind of a guarantor that builders are going to do their homework on this particular issue. Like in any field, people want to get things done. If someone's been building a building in a certain way, maybe this is the 10th time they've built an apartment building. They may have a way that they like to do it. It may have been a while since they really did a deep dive on what the up-to-date technologies are. I think this fee is going to get people's attention and ensure that they take a hard look at this and only use the fossil fuel infrastructure if they really need to. And we do still allow them to do that in circumstances where they feel there's a compelling technological cost reason where they have to go with the fossil fuel alternative. They will only be charged for that piece that deviates, only that part of the system. So I think in many cases you may see buildings paying a partial fee, but a much smaller fee than they would have if they hadn't grappled with these issues. It's an excellent point because even with the slide here that indicates that some of the renewable systems were significantly cheaper, in some cases looks like almost half a million cheaper, the building that I'm referring to here ended up going with a fossil fuel heating system. So maybe had the carbon fee been in place at that time, that might have been the nudge to really take a more serious look at the renewable technology and really it creates an even bigger delta of savings potentially for that building when we look at that particular example. I think another thing that I want to make sure everyone understands about this conversation is the fee, this new fee would be an important tool. Again we think it is going to change the way builders approach new construction, change the way institutions like the hospital, UVM, the way they manage their buildings and replace equipment in their major buildings. I think it's important for people to know at the same time that in, at the same time that we have this new role, which is potentially a new fee, BED is at the table with anyone who wants to build something in Burlington offering very generous, very significant incentives to go in the direction. That's baked into these models, right? Those potential incentives. In some cases they are and in some cases these are just the numbers without our incentives. So we may be able to go even further based, because this example is from a few years back, we can go even further now because we have new resources through our revenue bond that was approved just in December of 2021 by the voters and issued just in April of last year. And we have new incentives through state regulatory programs. There's new federal incentives and this was done before the federal bill even passed I think. Correct. So geothermal heating for example now has a 30% tax credit associated with it. So that would have a dramatic impact on these charts if that was reflected. So I mean that's exciting. Yeah we have a better economic case even than what we're presenting in the chart when we factor in those new federal incentives and some of the BED incentives are available as well. So maybe it'd be worth that. This is what we've just been looking at and actually make sure I'm reading this correctly. This is essentially just looking at is the whole building cost or just like the mechanical systems of 150,000 square foot. This particular example looks at the heating and water heating system cost. So that component of the project. That's right. Okay and let's look at what the analysis you've done for an existing system in one of these major buildings. So I'm going to go back to the slide here. So this slide is an existing building. Again a real example in Burlington, 50,000 square feet. And the light gray bar represents a baseline fossil fuel heating system replacement for that building. The darker gray bar represents that same system with the carbon fee applied. And then the green bars represent various renewable technologies. Again to your point not all of these have the new federal incentives, some of the new BED incentives included. What this example shows however is here the carbon fee really makes the difference. Here it might have been less expensive to go with just a traditional fossil fuel replacement. However when we account for the pollution impacts from that fossil fuel system and add those in then all of the renewable alternatives are cheaper in terms of an upfront cost of replacement than the fossil fuel system. So this really illustrates the power of the carbon fee to really level the playing field for renewable sources that are going to be not having the same type of impact in terms of climate change in terms of pollution and really ensuring that the fossil fuel system is accounted for fully. So Darren I know before bringing this forward and taking this to the voters you led some work that you know after you and I talked about in part I thought this was a really important part of the process having seen this in the past. You led some work reaching out to the stakeholders that are going to be most affected by this the owners of these very large buildings. What's the reaction been when you've been talking to the owners of properties that are going to be impacted by this new rule? That's right and I'm just going to pull up a slide here that just covers some of the some of the process that we had in terms of outreach with stakeholders with neighborhood planning assemblies and with you know we did a webinar with the district 2030 which really represents some of the developers and design community in Burlington. We really listened hard to the feedback that we heard and this policy reflects in a lot of ways a pragmatic approach. One example is we heard from some of the buildings that might be affected that if we end up paying the fee we'd like the opportunity to have some of the fee come back to us so we can use it for emissions reduction projects at our facility and when we think about large existing buildings and there's roughly 80 in the city that would be covered by this policy that are over 50,000 square feet you're talking in a lot of cases about folks that have more than one building the university, Champlain College, the school district, the city, the hospital and others and so they may have opportunities to cost effectively reduce emissions on their campus and it may have been that that particular system that they were replacing wasn't one of those opportunities so we've incorporated into the proposal the idea that some of that revenue can come back to them, support them in their mission to reduce emissions. That was just one example of the type of feedback we heard and the other piece is that really for existing buildings this is a phased approach this kicks in in 2024 but it wouldn't affect the existing building until they go to replace the system so this is something that is going to be phased that they can plan for or they can put into their capital planning and their capital budgeting and really account for as they move forward as opposed to something that would be more immediate and harder to account for financially. I think another great example of how you and the team really listened and amended our plans in response to the feedback was with the fact that for new construction most of this law this new rule goes into effect we'll go into effect assuming we're supported at the beginning of 2024 but we heard some specific feedback about multifamily water heating systems I believe that the you know builders here in this community just said look we understand what you're trying to do here we're going to be able to get there but the technology is just not quite there yet can you give us more time for those systems and that's what we've done we've moved it back a couple years the implementation deadline on that piece of it. That's right the ballot language reflects that as well that for water heating in multifamily buildings the implementation date would be 2026 instead of 2024 and really water heating in a single family home we have the solutions we have heat pump water heaters that are very efficient that can work well and even in a smaller maybe a duplex or you know up to kind of a four unit we can kind of handle that but as you get into a larger building we talked with affordable housing developers some of the electric based water heating solutions are relatively new we all agree that the technology is improving and going to be more cost effective but having a little bit more runway for implementation was an important component and we listened to that and incorporated that. So let's walk through now some you know I think many people will find a way to avoid paying the fee because everything we've been talking about here they will instead ensure that they're going with these electric renewable systems as much as possible but we do do we have any sense about how much revenue this is going to generate and what what are we going to do with it? Yeah so I'm going to jump ahead a couple slides here in terms of carbon pollution impact fee so you know there the couple of examples that we had are illustrative I think you know in one example the fee would have created about a $17,000 difference if somebody had paid it relative to the you know conventional system in another example it would have been $600,000 so this could be a significant revenue source and it could be a revenue source that really is dependent on how many permits are coming in for new construction and for heating system replacements but one of the things we were conscious of in developing this policy proposal was there was an advisory question in 2021 on town meeting day advisory question seven that really spoke to trying to have equity as part of the proposal and so one of the key pieces here is we're proposing that there would be a new city fund that would be administered to support low-income Burlingtonians renters households to access clean heating technologies with some of the revenue from this fee and between the inflation reduction act BEDs incentives and that potential new source of revenue we could do a lot to help low-income Burlingtonians access clean heating technology so that I think would be a really exciting development I already mentioned that existing buildings may be able to get a portion of the fee back the other piece here is the city is doing some exciting work electrifying the vehicle fleet and so another purpose here the revenue could support would be to continue that transition away from fossil fuel vehicles and towards electric vehicles one of the things I like about that for all taxpayers in the city is the savings operationally are going to benefit everybody because we know it's cheaper to fuel an electric vehicle there's less maintenance and it's cleaner so that's something that I think every Burlingtonian would benefit from great so let's uh you know I my sense I'm very hopeful that there's going to be support for this on town meeting day I mean when you look at what happened a couple years ago which was in some sense very related I mean it was it was the vote that made the vote we're coming forward with now possible there was a fair amount of discussion about this kind of carbon pollution fee at the time and still 65 percent of voters supported it so which I think really you know I'm proud that we live in a community that wants to take action at the local level on addressing the climate emergency it's I think a really impressive and fairly unique part of the Burlington story over the last pushing 40 years now of leadership on climate at the local level it's something that throughout my time in this office I've tried to continue that tradition and really lean into and I think voters agree and that's why 65 percent voted for last time I'm hopeful we will get at least that many this time I you know the concerns that I've heard we I think we've addressed a lot of them already we talked about you know I think some people do have concerns about is this going to drive up the cost of housing you know another concern can you speak to and I've heard less of this in recent weeks so I'm hoping this stays there but I know there was some concern about you know frankly some concern about the McNeil plant and whether this the emissions that are coming from the McNeil plant and does this initiative be cut somehow mean that McNeil is going to be polluting for decades into the future in a way that wouldn't otherwise and I know you've given a lot of thought to this issue so maybe you could talk about a little bit I'm going to do something interesting here I'm going to pull up my phone my phone here and I'm going to go to the ISO New England app which is the grid operator for the New England region and they have a great app so it's ISO to go anybody can download it and what it shows is I don't know if we can see this on the screen what it shows is the mix of energy sources that we're using to generate energy right now this this moment and I'll just read it for folks 56% natural gas 23% nuclear about 21% from hydro and renewables and a little bit from coal that's what's happening right now in ISO New England in the grid and what we have in Burlington is we're 100% renewable so you know this community and and and to the point you just made environmental leadership really throughout the decades this community has said we want renewable resources we don't want nuclear we do not want coal we don't want oil we don't want gas and Burlington Electric since 2014 has been able to put together a portfolio that really matches that community value we've had because of the focus on emissions we've had more discussion around McNeil lately and the thing that I think is important to realize is McNeil is an important part of that portfolio it's about a third roughly of our electric generation we also have wind and solar and hydro in the generation portfolio and we love all those resources McNeil is the only one that you can actually dispatch you can provide fuel when we need it to run the plant all of the rest of those are dependent on is the sun shining is the wind blowing is the river running and those are all great and then McNeil provides this great opportunity to say okay prices are high on the grid we're using more natural gas oil and coal we're going to run McNeil to help displace that from an emissions standpoint I think the thing that I would want Burlingtonians to know is McNeil is essentially helping to keep working lands as working lands we do not have foresters going into the woods to cut trees down for McNeil really what we're doing is taking the leftover wood from other higher value logging jobs that are done sustainably we have four foresters on staff who make sure that when we buy wood it's from a sustainable harvest we're taking the leftover wood and we're able to use it as wood chips for energy so just let's just pause that point the leftover wood is all coming from sustainable so it's first of all sort of like efficient that we're using a sustainable leftover wood to begin with right these are trees that are being chopped down for for other purposes right and then that we only take that from forests that are being managed in this sustainable way that's right we have standards for our Vermont harvest and standards in New York because we get wood from about a 60 to 70 mile radius so it's local and in number of cases we're managing those lands so sustainably that 30 years later we can come back and have another harvest we're not talking about clear cutting like we have in the southeast I think when we talk about climate concerns around biomass a lot of folks think of clear cutting in the southeast and taking wood and transporting it across the Atlantic to Europe to be burned that's not what's happening at McNeil you know we're local we have sustainability standards and we're using essentially what was called the residue the leftover wood and we're providing economic value back to the property owner who's able to keep that land as a working land maybe if we weren't doing that there might be a pressure to develop that land and if we had a development happen there we lose the carbon storage and sequestration that those trees are providing it's one of the most complex processes from a carbon accounting standpoint but I think it's really important that we look holistically at not only the emissions from the plant but also the carbon sequestration that's happening and try to have a holistic look at what the you know wood chip plan is providing it's I we were at a press conference the other yesterday where this issue came up and actually you gave a shared a stat that I hadn't heard before that in the forests that we are working with there's actually we measure we know how where things stand in terms of carbon sequestration versus new wood being chopped down and that's right and what what do those numbers say yeah so we had analysis done in 2020 as part of our integrated resource plan that we submit to the public utility commission a third-party analysis that says in the lands where we harvest in New York and Vermont we are actually adding net tree carbon storage since at least 2003 that's as far back as the study went and what that means is we can be in a cycle where we think of it as the above ground carbon cycle you know with fossil fuels we're taking carbon that's been stored geologically for millions of years we're putting it in the atmosphere and there's no plan to resequestor it with wood chips we're taking carbon that's been above ground essentially part of a natural cycle and we can harvest and we can regrow and the important part is that we're regrowing if we weren't then there would be a climate concern I think relative to how we're managing McNeil all the literature I've looked at from the IPCC the EPA the World Resources Institute suggests that we really need to measure the land use impacts of using wood chips and when we look at it and we're adding that tree carbon that's a positive especially we consider Vermont 100 years ago 200 years ago a lot of it didn't have forest was really farmland that had been cut you know and now we've been able to regrow forests in a number of areas in Vermont and have a climate benefit as a result of that we are almost out of time and I believe maybe just let's just shift gears slightly and just remind people we've another a related but separate announcement is the new green incentives for burlingtonians from BED are out for people that want to consider electric vehicles cold climate heat pumps a whole range of other technologies what should people know about those incentives and how do they find out more the short story here is it is the absolute best time to consider moving to an electric vehicle or a heat pump or other technology from an incentive standpoint we have the best combination of incentives that we've ever had when we consider the federal inflation reduction act combined with BED incentives invite anybody who's interested to go to our website burlingtonelectric.com there is a rebates tab and and folks can scroll through and see what technologies they're interested in reach out to us you can email us at energy services at burlingtonelectric.com and our energy services professionals will give you know free consultation and advice to any homeowners or businesses or property owners anybody in the city who's looking at making improvements or switching to an electric vehicle I had a long conversation with one customer yesterday who was considering the switch to an electric vehicle we went through a lot of the different aspects of owning and operating electric vehicle and we're happy to have those conversations with customers you gave a pretty striking example at our press conference on this that we did a few weeks ago that took the example just you know we just picked this one of a range of a number of different electric cars electric vehicles that could benefit from these incentives but we focused on the Chevy Bolt $31,000 kind of list price currently if you layer the $3,000 local BED incentive that many BED customers are eligible for low and moderate income customers plus I believe is now a $4,000 state incentive plus this brand new $7,500 federal incentive that is available right now and may not always be available because the rules are still come somewhat even though this is a 10-year program the rules are changing and they may be less generous for some cars at least in in the near future right if you go right now I mean you can you can get incentives for it it takes the cost of a $31,000 car down to $15,000 and then you can come home and if you do a little bit of work and set up your home with a with a kind of smart charger which will help you do you can reach fill that car for the equivalent the electrical equivalent of 70 cents a gallon it's uh it's really a game changer the this federal incentives plus what we're doing locally and if we're going to get to our net zero goals Burlingtonians need to know this and enact on it and call BED and help help get this done the vehicles in your home this is how we are going to do our share to end the climate emergency and it's happening we're getting it done I think we'll cut it off there thank you for tuning in tonight Darren it's always great to have you on this show and be able to talk about climate issues with you I appreciate how dedicated you are and committed you are people of Burlington are so fortunate to have you leading this effort so skillfully and I think the last few weeks have been an exciting time for this effort and I'm looking forward to you know coming back and talking in the months ahead about our next update with the net zero plan seeing what the results show we're gonna we're gonna keep pushing on this very hard in 2023 so I'm sure we'll be talking to again soon thank you mayor thank you for having me all right we'll see you everyone again next month in February thanks for tuning in today and have a great month


a hallmark card when you carry enough to send the very best. Tonight from Hollywood, the makers of hallmark cards bring you another and their exciting new series of broadcasts on the Hallmark Hall of Fame. This week Hallmark will bring you true to life stories of actual persons who in their own way have contributed to a better world for all of us to live in. Presented on the Hallmark Hall of Fame by our distinguished host, Mr. Lionel Barrymore. Ladies and gentlemen, and welcome to the Hallmark Hall of Fame. I'm sure that most of us know the heroes of bronze and marble and monument and song, but too many heroes, men and women alike, have earned fame without receiving it. To those people who service, sacrifice and devotion achieve great things, now too little known to us, Hallmark respectfully dedicates this Hall of Fame. And tonight Hallmark pays tribute to Ida Lewis. I suppose most of us can recall a lot of exciting stories of men against the sea, but how many of you know any such stories concerning women? Well, tonight we're going to bring you the true and dramatic story of a brave woman against the sea, the story of Ida Lewis. And now here's Frank Goss from the makers of Hallmark Cards. When you're looking for a way to say something to someone you care for, look for a Hallmark card and you'll find the card you want to send.  That's why Hallmark on the back of a greeting card has come to mean you cared enough to send the very best. Lionel Barrymore appears by arrangement with Metro Golden Mayor, producers of Battle Circus starring Humphrey Bogart and June Allison with Keenan Nguyen and Robert Keith. And now here is Lionel Barrymore with your Hallmark Hall of Fame. Tractless arena of his war, the inspiration of poets and painters, so majestic in its calm and so terrible in its wrath. Now this is a story of the sea, a true story of a woman who dared its wrath. It seems through the blackness with the voices of a thousand demons. It lashes the sea into moving mountains of destruction and hurls it with the deafening thunder against the reef, pounding and tearing and grinding away at that which only hours ago was the proud clipper ship out of Boston Hall. Long shore, a shore but a few hundred yards away, a handful of men struggle to launch a long boat into the boiling sand. One of the men is the president of the Massachusetts Humane Society.  The sea pounded sullenly at the Massachusetts coast, the farther south runs in long, heavy swells across Rhode Island's Narragansett Bay, the bay which Ida Lewis knows so well that she watches from the windows of the lighthouse on Lyme Rock Island, an insignificant shelf of rock and Newport Harbor, barely large enough with a great stone tower and the caretakers cut it. This is the world of young Ida Lewis and of her father, Captain Jose Lewis, keeper of the life. I was hoping you were asleep. Sleep? How could a man sleep knowing that he's failed? First hurricane of the winter, I can't even get out of bed to tend my own life. Now please, Father, you've got to be quiet. You know what the doctor said. Oh, blast the doctor. Did you trim the burner? Yes, Father. And the mirrors? I'll polish them after I fix your breakfast. I don't want any breakfast. I want to get out of this bed. I'm sorry, my dear. I just hate to be a quitter, that's all. And yet that's what it's come to. There's nothing left except to quit. Oh, now you know you don't mean that. Why, this is our island. This is our light. Girl, there's no point in fooling ourselves. I'm through. Well then, then I'll tend the lighthouse for you. Ida. Yes, yes, why not? Didn't I do it last night? I can do it every night. I know everything there is to do. How to keep the light, how to signal to shore, make out reports, row about, swim everything. There's one thing you forget, the lighthouse services for men. I don't care. My dear, you're going on 17. It's time that you live the shore, and time soon to think of marriage. This is where I want to be, Father. To be part of the sea, smell the salt air, to hear the cry of Gove, to watch ships down for California and the China coast, to know that in darkness and storm and fog, that our lights guiding them to safety. Hi, child. This is our place, Father. Well, even if we could stay, my dear, the day is coming and maybe not far off, and I won't be here. You'll be all alone. Even then, Father, this is my place. Ida Lewis is indeed alone. On one fast spring day, the Lime Rock lighthouse is untended for the space of a few daylight hours. Ida's ashore at her father's funeral. Then she returns aboard the tiny supply boat which calls weekly at Lime Rock Island. Master of the boat, young William Wilson accompanies Ida to the door of the caretaker's cottage. You've got your trunks packed, Miss Lewis. I'll carry him down the land. Thank you, Mr. Wilson, but I haven't packed anything. If you have time, no, I would like your help in another way. Anything I can do. Then come in, please. I want to write a letter to the lighthouse board in Washington, and then if you'd be good enough to mail it for me. Of course, but maybe I don't understand. Yes?  I don't intend to. I'm asking the authorities in Washington to appoint me the official lighthouse keeper of Lime Rock Island. You find it amusing? Yes, keeper. I suppose you think a woman can't do it. It certainly is, and Washington will tell you so. I wouldn't be too sure of that, Mr. Wilson. Until a substitute is sent out here, somebody has to tend the light, and I'm going to do it. That's my answer to you, Mr. Wilson, and to Washington. The weeks pass slowly, Fried and Lewis. Once every seven days, she goes down to the landing to wait for the coming of the supply boat, and the weather. Yes, this is the last time I'll be bringing supplies out to you, Ida. You know exactly what's in the letter, I suppose. I've got a pretty good idea. Information, Mr. Wilson. This is official notification that by special act of Congress, Ida Lewis is hereby appointed keeper of the Lime Rock Lighthouse. Of all the simple-minded fools. Well, there's no other name for them. A hand over the safety of our harbor and our ships to a woman. Trusting the lives of our seamen in the hands of a 17-year-old girl. Mr. Wilson, I value the lives of our seamen just as highly as any man does. All right, I'm not quarreling with you. Just... Mr. Wilson. That sounded like an explosion. We can and it poured atoms. Something's wrong, it's a signal. Wait, wait, out there in the lead channel. Yes, it's a robot, it's capsized. Wait, Ida, help me cast off. No, no, it would never get there in time. You know there's no wind in the lead channel? I'll use the robot. In a moment we will return to the second act of our story of Ida Lewis. How do you feel when the mailman brings you an unexpected letter or a card from a friend you haven't seen in a long time? Isn't there a special brightness to the day even if the snow is falling or the sun is overcast? Somehow your job seems a little easier and your joy is a little happier, just by that one kind remembrance. Well, most of us haven't the time to write a letter to our dear ones as often as we think of them, but we can show our thoughtfulness in a special way, a way that takes so little time and costs so little money. I mean by sending hallmark cards. You'll find there's a hallmark card that expresses your warmth and wishes perfectly, a card to say congratulations to a new mother, or happy birthday to a relative, or just a cheery hello I'm thinking of you. Yes, sending a hallmark card is always the gracious thing to do, and you'll find you'll be paid many times over in friendship that can't be measured by cost. Why don't you remember someone today who has a card that has a hallmark on the back? The familiar hallmark that means you carry enough to send the very best. And out here again is Lionel Barrymore. ...and then grasped wildly at a pair of arms reaching down to them over the stern of another rowboat, arms slender and graceful, the arms of a 17-year-old girl. And when it's over, it goes quietly back to a lighthouse and to a duties. Then, a few weeks later, young William Wilson ties up his supply boat at the island landing. This time there's another man with him, a man who goes alone up the path to the caretaker's cottage. Miss Lewis, the Massachusetts Humane Society, which I represent, has received a report of your rescue of the two soldiers from Fort Adams. The other report was sent by the commandant of the fort to the War Department in Washington. Oh, dear, I didn't expect such a fuss to be made. An act of such remarkable courage deserves to be acknowledged, Miss Lewis. And it's my hope to bring it before the public at large. Mr. Niffle. Wait, I have a reason. For half a century, the Massachusetts Humane Society has fought to lower the needless loss of life by shipwreck along the Atlantic coast. The society has built its own life-saving stations wherever and whenever funds would allow. But there's need for much more, more lifeboats and equipment, more crews to man the stations. And what prevents this? Simply public apathy. Sir, if there's any way in which I can help... There is. As a woman who's already saved two lives, you can write and speak and influence other women. And through them, the men. Then you have my word. Thank you, Miss Lewis. Lewis is soon to help in a way still more dramatic. The hours near sunset, the skies gray and lowering. The driving wind lashes across Newport Harbor and sends steam dashing over the boat landing at Rock Island. Where Ida waits for the approaching supply blower. Sider, get the rigging off me. If I can lift the foam. It's broken. Here, take my arm. I'll get you up to the top. Ida's the boat, she's settling by the bar. Darkness broken only by the narrow finger light eye over the cottage on Lime Rock Island. Can you hold the end of the bandage? Sure. I'll try not to hurt too much Will. I said I'll try and... You called me Will. For the first time, I'm not Mr. Wilson. Oh. Well, I... I didn't realize... No, don't apologize. I like it. Oh, I'm sorry. Now you've got to get to a doctor. As soon as I finish this, I'll get the lantern and signal Fort Adams. You think a boat would put out on a night like this? Listen to it. Will. That didn't sound like thunder. I remember the last time we heard that. Pass the fragile ruleboat like a child's toy.  There's no more, ma'am. If it were five of us in the long boat the rest of us are still on ship. No, no, there's still a chance. Help me with it. Three times she struggles to the shattered ship and three times she returns. Officers and crew were safe to the last man. Storms but a faded memory. Seagulls wheeled peacefully over the sparkling bay. The new and bigger supply boat ties up to the lighthouse landing. Oh, Will. Well, you've named her after me. He certainly is. Is she easy to handle? Well, frankly, no, any other way. And she wouldn't have any other skipper. And now it's time the skipper got those supplies up to the house. Aye, aye, ma'am. I'll be coming out for you in the morning. The presentation at the port is set for known sharp. Oh, I wish they wouldn't make such a commotion. It frightens me. It frightens you? What could ever frighten you, my dear? Ceremonies. Ceremonies terrify me. All of them? Even the ceremony we're going to have? No, not that one, Will. You'll be by my side. At the appointed day, at the appointed hour, to a halt on the parade ground, the commandant of the fort, officers armed, and Ida Lewis walked shyly past the troops, lined up in dress parade. Then she curses before an old friend. Miss Lewis, in tribute to your brave and selfless acts of courage, in recognition of your repeated acts of valor in the saving of 22 lives from the sea, the Massachusetts Humane Society is honored to present you this silver medal of achievement. Thank you, Mr. Nichols. No, one woman more. As a further acknowledgement, as a signaled tribute from the nation at large, I hereby present to you, Ida Lewis, by special award of the Congress of the United States, this gold medal. The first gold medal ever to be awarded by Congress to an American woman. I... I'm humbly grateful, sir. My dear, it's my place to be grateful. I once asked you to write and speak in the cause of life-saving, but your acts have spoken so much better for you. Now the people and the government understand. The life-saving service is no longer a dream. It is a reality. It was later renamed the Ida Lewis Lighthouse as a permanent tribute to her memory. And the Massachusetts Humane Society was able to prevail upon the government to establish the official United States life-saving service, which we know today as the United States Coast Guard. The saving of lives is a tradition of the United States Coast Guard, which down through the years has served so faithfully and so well. Yes, any young man today can be proud of being a part of this fine organization. Today there's a Coast Guard reserve, too. It's opened to young men between 17 and 18 and a half years of age. You can find out all about it by writing to the United States Coast Guard Reserve, Washington, D.C. And now for news of the next week's story on the Hall of Fame. For a moment, though, Frank Goss has a few words to say about good taste. Have you ever analyzed the words good taste? It's a complimentary term all of us use often, and yet it has nothing to do with cost or rarity or social prestige. You might say that good taste simply means suitability, doing or saying or wearing the right thing at the right time. That's why so many thoughtful people turn to hallmark cards when they want a special greeting that's correct for the occasion, correct down to the last detail. You'll find that hallmark cards always capture a mood, whether it's the fun of a birthday or the promise of graduation or the joy of Mother's Day. And here's something else you'd like to know, even though the quality of hallmark cards improves year after year, their prices remain the same. The next time you ought to send happiness in an envelope, go to a fine store where hallmark cards are sold. You can count on it. The hallmark on the back of every card you mail will tell your friends you carry enough to send the very best. And now here again is Mr. Barrymore. Well, Frank, it's good to hear that good taste in choosing hallmark cards don't cost any more because all of us like to feel that we're men and women of good taste. I think it was a Frenchman named Poincelot who once said, good taste is the flower of good sense. And an Englishman, Fielding, the author, put it this way, a truly elegant taste is generally accompanied with an excellency of heart. Well, I think our story next week on the Hallmark Radio Hall of Fame will be to your taste too. It's about another remarkable woman, this time the story of a young Indian girl who guided the famous expedition through a hostile wilderness opening the great northwest to a growing America. The girl's name was Sarkarjawea. And I hope you'll all be listening to this stirring true story of courage and adventure on the Hallmark Hall of Fame. A Hallmark Hall of Fame is every Sunday our producer, directors, William Gay, our music was composed and conducted by David Rose and our script tonight was written by Lennon Sinclair. Until next Sunday then, this is Lionel Barry Moore saying good night. For Hallmark cards that are sold only in stores that have been carefully selected to give you expert and friendly service, remember a Hallmark card when you will carry them to send the very best. Ida Lewis was played by Barbara Eiler with Whitfield Conner as William, Evanus Hosea Lewis, Ted DeCorsias Mr. Nichols and Peter Leeds as Gilman. Every Sunday Hallmark cards presents two great programs for the whole family's enjoyment. The Hallmark Hall of Fame on radio with host Lionel Barry Moore and on television with Ms. Sarah Churchill. Consult your paper for time and station. This is Frank Goss saying good night to you all until next week at the same time when we present another true to life story of actual persons who in their own way have contributed to a better world for all of us to live in. Sakaya Juiya on the Hallmark Hall of Fame. This is KMBC, Kansas City.


If you would have told me years back that Sonic the Hedgehog would be the one to get video game films, right? I don't think I would have believed you for a second, especially when the blue blur doesn't have the most successful track record when it comes to his video game outings. But here we are on the tail's end of 2021. There was a pun there. And we're gonna talk about Sonic the Hedgehog 2, specifically the first trailer. Before going into this breakdown, I should point out I have two generations of Sonic fans living in my house. There's me, the OG fan who grew up on the original Sonic games. I'm young and in touch. And then there's my young son who kind of became a big fan on his own. I showed him like one or two of the games and he just went all in on Sonic. We have all the comic books, he's played all the games he can get his hands on, and of course we own and he's watched the first movie a million times. So there's two people in this household that were very interested in this sequel and what it has to offer. Let's find out. Okay, so the trailer starts, what? One of Sonic's buddies that for some reason is a bat with big boobs? Rogue or Rouge? I think it's Rouge. I never really cared for the Sonic friends lineup. I was always just the Sonic tails, knuckles, shadows fine. As long as he has his gun and he's shooting people he's cool with my book and his motorcycle. Anyway, what do you want? Oh, I'm supposed to tell people that they should subscribe to this channel. Adam does movies as I put out content constantly. Thanks furry bad girl.  Wow. These first opening seconds are not exciting.  This is straight up into the Spider-Verse right now. Every single Sony trailer starts with a dark cityscape and Spider-Man jumping from the top, but what? Big the cat. Why are all you characters coming into my studio? This isn't a Sony film. Oh, it's Paramount. Okay, that makes more sense of this next scene where James Marston's character Tom says, What are you Batman going around in the city? He's clearly Spider-Man. He does the same pose off the building as into the Spider-Verse. He's quipping. He's telling jokes. Come on, Batman. We then get some tees shots of Dr. Robotnik aka Eggman coming back to Earth. He was sent off to a different planet at the end of the first.   Okay, listen. I enjoy the first Sonic the Hedgehog. I think it's a fun, silly little film for the whole family. Is it doing anything groundbreaking? No. Is it copying a ton of different films? Absolutely. This looks to be doing the exact same thing, which is a bit of a shame because I thought because of the success of the first film, they would go a little bit more wild with things, maybe go off Earth, or just be a little less samey than the same crap we've seen time and time again. But it's just a trailer. Maybe the final product will wow me. It's not going to. But at least it'll be serviceable, right? And at this point, that's all we're looking for. He's got goosebumps. Wait a second. Did you steal that from Oprah? I want to point out Sonic says an Oprah joke that went over my son's head. He's nine, doesn't know who Oprah is. Maybe that's bad parenting? I don't know. But weird, weird joke to throw in. Let's keep going. Ben Schwartz is great as Sonic, but the real draw is right here for me. And that's Jim Carrey as Robotnik. He's back. He's got a brand new stash as he points out, a literal mustache. He's still not rocking the pouch that Homer Simpson got that Robotnik has. I'm okay with it. Kind of like a skinny Robotnik. He's a little more threatening to me. I don't know why. Hope I'm not too late. Here we are, everyone's favorite little sidekick, Tails Miles Prower. Pun is just timeless. And I read on the Internet somewhere, which makes it true that he's voiced by the video game voice actress. Colleen O'Shaughnessy. That might not be even close to how the name's pronounced, but I don't claim to be good at this stuff. I'm just reporting on it. I noticed the trailer has a lot of references to the game. We have Tails' iconic plane. We have that gorgeous Chaos Emerald here. It doesn't look like Sonic's gonna have to track down the individual ones. The whole thing is already intact. Robotnik's using it as this source of power. There's a montage of a lot of things going on. It looked like there's little cows from Sonic Adventure. I noticed the snowboarding's back from both Sonic Adventure and Sonic 3, I believe. Or it's Sonic and Knuckles. I think it's Sonic 3 though. You can even hear the pinball noises as he bounces off the walls. Ding ding ding ding ding. And then we end the trailer with the new antagonist, Knuckles. I have a couple crazy guesses as to what's going on here. Either A, Knuckles is being tricked by Robotnik into thinking Sonic is a threat, or B, he's being blackmailed. He needs to work with Robotnik in order to save a family, or who knows, his planet. It doesn't matter. Either way, Sonic and Knuckles are buddying up at the end of this film. They're gonna work together with Tails. They're gonna have the holy trinity of moments where Knuckles is gonna drop down with his fists and the other two are there and it's gonna pan in. And Zack Snyder's gonna direct this scene. It's gonna have some explosive music remixing Sonic Adventure 2's main theme with that of a Hans Zimmer joint. The second incredibly wild prediction is that Sonic is in fact gonna go Saiyan mode. He's gonna go supersonic in this. We're gonna see the blue blur now yellow. Do I think we're gonna get hypersonic in this? No. I don't think we're gonna get hypersonic in this one, fans. And I'm not making that up. Hypersonic is a thing. I learned about it because of my son. The vast amounts of knowledge his young mind could sponge up is being wasted on Sonic trivia. Just like his old man, he's shitting away his young mind and replacing what could be useful facts about the world with facts about Pokemon or the names of most of the mutants in the X-Men universe. Why do I know this stuff? Why do I know Sonic has a character named Yogurt the Bunny? Yet I didn't have a hard time listing all the States in America. Let's move on. Let's press on. Final takeaway from this trailer. I really like the logo. I like it's got the Sonic for the C and then we got the two with the tails at the end. It's nice. The music being used, however, not great. Pretty generic stuff. First impressions from this trailer looks to be about on par with the first. I'm not seeing anything too wildly different or really that exciting. I think it'll probably be another fun family film. I don't think they're going to screw this one up like a lot of sequels have to kids films. I think Sing 2 comes out soon. Although to be fair, I didn't think Sing 1 was very good in Troll's World 2 where I never saw, but that just looked atrocious. When my kids don't even like it, that's telling. That's troubling. Anyway, those are my thoughts on the Sonic 2 trailer. Let me know what you have to say. Did you like all the game references? Did you think that they did Knuckles Justice? Whatever that means? Well good news, there's a spot you can put those thoughts right in the comments below. Thanks again for what's that? Vector the Crocodile? Another character from the stunning universe of Sonic? You want people to subscribe? Well, I was already told by the big titted bat thing to have people subscribe earlier, but I'll say it again. Subscribe to the channel. We have a lot of fun here and we could sure use some more support. I don't know why I'm saying we, it's just me. I run this alone. But I feel like we're a family. Those that have stuck around for the trials and tribulations of the channel. Alright, see you later. Hey, since you're still here, go ahead and hit the notification bell so these videos show up right in your feed. I'm also on Patreon at Patreon.com slash Adam Does Movies. There's a tier at just $1 where you can really show your support and say, Adam, I like what you're doing and I love that you just did the theme song of the original game. See you around.


Hello and welcome to this session. This is Professor Farhad and this session we would look at IFRS 9, which is the classification and measurement of financial assets and liabilities that we covered earlier in IAS 23. This topic is covered in international accounting, minor topic on the CPA exam. It's definitely covered on the ACCA exam. As always, please connect with me on LinkedIn. YouTube is where you would need to subscribe. I have 1500 plus accounting, auditing and tax lectures. If you like my lectures, please like them, press on that like button, share them, put them in playlists. If they're benefiting you, it means they benefit other, share the wealth. This is my Instagram account. Please follow me on Instagram. I'm trying to grow my following. This is my Facebook and this is my website. On my website, if you'd like to support the channel, if you like my recording, you can make a donation. Also on my website, I do have offers on regular basis. Right now, Becker CPA is offering a thousand dollar off of the Becker bundle. Now you don't have to buy the whole thing. I mean, this is with all the extra reviews and everything, but you can buy pieces and now it's on sale. I strongly suggest you go for it. With Becker, you would have over 10,000 plus multiple choice questions between all sections and problems and simulations and hundreds of hours of lectures by Becker qualified faculty. So I strongly suggest you take advantage of it or at least check it out, go through my website. Let's go ahead and get started working with IFRS 9. Now, before we start, I know you're not going to like this, but I always would like to let you know that this topic, investments, basically investing in debt and equity, I do cover this topic in depth in my intermediate accounting using 20 lectures. So I talk about investments in bonds, stocks, but this is US GAAP. Now, US GAAP and IFRS, they have similarities and they have differences. In this session, I will try to explain how IFRS looks at it from a brief perspective and compare it to US GAAP. So if you're interested in more depth, in more examples, in more explanation about US GAAP, go to my intermediate accounting chapter 17. I know you hate to hear this, but this is the truth. I'm going to be summarizing something in 40 minutes that took me five hours in chapter 17. Okay, this is not intermediate accounting, this is an international accounting course. So IFRS 9, it's going to help us classify and measure the financial assets and financial liabilities that we learned earlier about in IAS 23. So we're going to be learning about the initial recognition, which is pretty straightforward. Usually you would record it at cost, how much you paid for that financial asset, or how much that financial liability incurred for you. But the question is subsequent recognition, it means later after you have the asset, what's going to happen? It's going to all depend on the classification of the financial asset and the financial liability. So it depends on how am I classifying this asset, this financial asset and financial liability. And how am I classifying this financial liability? And what do we mean by classification? Well, we're going to have classification. We're going to say we made an investment, we have a financial asset, how are we going to classify it? We now have a financial liability, how are we going to classify it? Let's start with financial assets. So we have three categories, amortized cost, financial asset at fair value through comprehensive income, financial asset at fair value through profit and loss. And as always, when there is a list, I'm going to go through the list and we're going to work an example later. Examples, not one, many examples. So the first thing we're going to explain is when do we classify a financial asset at amortized cost, when at amortized cost, this category here. So amortized costs are for trade receivable, which is a counter receivable, simple loans like short-term loan and bonds held to maturity. So here's what I want you to think. Here's what I want you to think. Every time you think of a financial asset, and you say it's going to be classified as amortized cost, think of bonds. What do I mean by think of bonds? Because this is really what we, that's really the most important one. Bonds means you made an investment, you bought a debt, you bought a corporate bond from someone. And you do have the option of classifying it at amortized cost. You do have that option. So that's what I want you to think. Bonds. And you are planning to hold this bond for maturity. That's another important concept. So you bought this bond. Bond is an investment. It's not only you bought it, you want to keep it until it mature because bond mature. So you will keep those at amortized cost. Now, the term amortized refers to the fact that the carrying debt instrument, the bond, at cost often require that it's recorded at a discount or a premium of its face value. The discount or the premium is amortized generally or using the effective interest rate method. So when you buy the bond, the bond might be might be above the face value or below the face value. It's either going to be a premium or a discount. So you'll amortize the premium or the discount. Now, here's why I don't want you to think of receivable at amortized cost. Because when you have a receivable, usually you don't have a premium or a discount because the period is so short that the period is very short. You're going to get that money pretty soon, 30, 60 days. There's no really time lag. Simple loan, the same thing. If you have a simple loan, that's why when you think about amortized cost and a financial asset, think about a bond held to maturity. So notice no equity or stocks, no equity. Simply put means we cannot have a stock because the stocks don't have a premium, don't have a discount. And also stocks don't mature. There's no maturity date for the stock. And that's why in this category, there is no stock. So we cannot have an equity or stock as a financial asset and say, we're going to treat this as amortized cost. For assets to qualify for inclusion in the amortized cost, it must pass two tests. And notice once we pass this two tests, it's going to exclude the stocks out again. We have a business model test, which state that the business objective must be to hold the asset in order to collect contractual cash flow. Well, guess what? When you have stocks, you don't hold the stocks to collect cash. You may receive them and it may or may not. But a bond, you would hold it to receive the cash because it's the contract between you and the issuer. So that's why under the business model, bonds will pass this loan at the bank pass this test or even loans when the bank make loans. This is basically they have a financial asset and they can listen at amortized cost. The second test is contractual cash flow test, which is the asset must give rise to only interest and principle, no dividend. So again, what we're thinking is thinking of bonds. So bonds, we buy the bond and we wait to be paid interest and principle. Therefore, the bond is the only kind of think of it. It's not the only one, but think of it as the only financial asset that could be reported at amortized cost. Okay, now we're going to move to the second category. Remember, we looked at amortized cost, we're going to look at the second category. Now we're going to look at financial assets at fair value through comprehensive income. Now for financial asset at fair value through comprehensive income, we could have we could have debt and we could have stocks. Okay, just want to let you know though, this category you could have bonds and you could have stocks, you could have equity investments. So simply put, you can have equity investments or equity securities and you can have debt investments or debt securities. Okay, so here now you have both categories. Now, what are financial assets at fair value through comprehensive income? Here's what happened. Roughly it corresponds to something that we know, something called available for sale category. What is available for sale category? Okay, so when do we classify something as financial asset, fair value through comprehensive income? Well, when we buy and when we make an investment either in bonds or stocks, we made an investment, we have a financial asset. The question is, what is our intent? What do we plan to do with this investment? Well, we kind of have three options. Okay, we kind of have three options. Think of these as three options, one, two and three. The first option is to hold forever or to maturity. Let's say hold to maturity, hold to maturity. Well, guess what? If we're going to hold something to maturity, if we are able, like a bond, then we're going to be using the amortized cost. Okay, four bonds for debt. In other words, there's no stocks in this category. So we're going to figure out this category. Okay, well, the other option, why we made an investment, there are two other reasons. Well, the other reason, not two, let's take care of it step by step. The other reason is trading or speculation. Let's put it trading or speculation. What does that mean? That means you bought it, you bought the investment and you're trying to flip it. Flip it means you're trying to make the sale really quick to make a profit on that. So you bought it with the intention of selling the investment trading. Then we have a third category, which in between those two and I put it in the middle because it's in between those two. So you make an investment, you're not planning to hold it forever. You're not planning to flip it in the near future. It's in between. We call this category available for sale. It means I made the investment and I'm not going to sell it in the near future, but I'm not going to hold it forever. But if the time is right, the price is right, I might sell it. So it's available for sale. So financial asset that are considered in a sense available for sale, they will have this classification. Financial asset at fair value through comprehensive income. It means and this is important. I did not emphasize this point yet. It means it's going to be reported at fair value. It means at the end of the year, you have to report it at fair value. Notice when we talked about amortized cost, there was nothing about fair value except when you buy it. It's reported initially at fair value, but there is nothing about fair value about amortized cost. Now those financial assets are going to be reported at fair value. So this category applies to fair value measurement to the financial instrument that falls within it, but allows fair value gains and losses to be recorded in comprehensive income rather than income statement. So you're going to be reporting those financial assets, which are could be investment and bonds, investments and stocks at fair value. Now what does fair value mean? Maybe I should explain this. Let me just give you a simple example. Let's assume you bought a house. I'm going to build a house. I'm really lousy at building at art. This is a house. All right. This is a house. And you paid for that house, you paid $300,000. That's how much you paid for that house. A year later, this house is worth $340,000. This is how much fair value. Obviously, you did not sell this house, but the value of it went up $40,000. Now, if the value went up or the value could have also went down to $250,000, or the value could go down by $250,000. Now, if the value go up, if you have a gain, this $40,000 gain, where are you going to report it? That's the question, because you have a $40,000 gain. If you bought the house and you're planning not to sell it, you bought this house, you're going to live in it. But maybe if the price is right at some point, you might sell it. You're going to report this gain in other comprehensive income. This is what we mean. The gain will go through other comprehensive income. It doesn't go on your income statement. Now, why not? Because the IFRS thinks it should not go through your income. It should not affect your profit, because it's not part of your profit. You bought it as an investment. So if it's not ready to go to the income statement, it will not go to the income statement. So it doesn't affect your profit. As I told you, you could also have a debt for that financial assets. That financial asset means a bond. To qualify for inclusion in this category, they must pass both the business model and the contractual model. Think about bonds. They pass both, similar to the case for amortized cost category. So to have a financial asset that's debt in nature, which is bonds, it has to pass those two categories. That's fine. That's fine. We can look at that. The main difference is that the fair value OCI business model test allow the entity to engage in larger and more frequent asset sales. Remember, the amortized cost, you don't sell it, you keep it. And the reason, think about amortized cost, amortized cost versus fair value OCI. When you buy something for amortized cost, remember, it's bond held to maturity. My pen is not working properly. Bond held to maturity. It means you're going to keep it until it mature. And if you know anything about bond, when they mature, they go back to face value. So if you have a bond, if you have a debt, and it's held to maturity, it means you're not going to sell it. They said report it at cost. Why? Here's why. Because during the life of the bond, during the life of the bond, this bond could go up in value, go down in value, go up in value, go up in value, go down in value at the end of the day, at the end of the day, it's going to go up down, up and down. At the end of the day, it's going to go back to its face value. So what we say is, don't bother booking the gains and the losses when they go up, when they go down, up and down. Because at the end of its life, it's going to go back to its face value. If you don't know this about bond, I just told you this. That's why if it's held to maturity, you keep it at amortized cost. Now, if you want a bond and you want to sell the bond, sell it on regular basis, more frequent sales, not held it, then guess what? Then you could classify it as fair value OCI. Then if the value changes, then you would record the change in the value. So that's why under fair value OCI, you can trade it a little bit. You can trade it. You can trade that. You can trade that bond. It's still the case that the entity primary business objective must, it's still the case that the entity's primary business objective must be to hold the instrument in order to collect contractual cash flow. Although you might be sell it and sell it more frequently, but the purpose of buying a bond is to get the cash. Okay? So a bond can be in this category. A bond at that investment can be fair value OCI. Now, just a little bit more of information about this topic. IFRS 9 also contain an important provision that allow entity to place equity investment in the fair value OCI category if they are not held for trading. Now, as I told you, you can have equity here. You can have equity in this category. Okay? Now, providing a fair value OCI option for equity securities differ from US GAAP. Here's why. Because under US GAAP, let me just kind of tell you this also you need to know this under US GAAP, under US GAAP, if it's equity, if you buy an equity security, all gains and losses go through the income statement. So for equity, all gain and losses goes through the income statement. All gains and losses goes through the income statement. On the other hand, IFRS, you could have equity and you could have it in OCI or you can have it later. You're going to have it in the income statement. And this is one of the major difference between the two. This provision is an important instance of the recent IFRS, US GAAP divergence and it's discussed. We're going to discuss it shortly. Okay? So under US GAAP, if you have equity, it can only be fair, think of it, fair value PL, profit and loss, which we're going to see later. US GAAP only fair value profit and loss. Guess what? IFRS, if you have equity, it can be fair value OCI or fair value, you're going to see shortly PNL. Okay? Fair value PNL. Financial asset reported at fair value through profit and loss. Again, we're still talking about financial asset. Now, what is this category? Well, this category is a residual category. Basically, if it's not available for sale, if it's not held to maturity, it must be trading. Okay? It includes any financial asset not allocated under the other two categories, which is the amortized cost and fair value OCI. So what does it include? Think of it, asset held for trading. And I put this picture here as a trader, stock trader trading stocks. So when you have a financial asset and this asset could be debt, this asset could be equity, it could be stock or it could be bond. It doesn't matter. If it's held for trading, you may buy a bond. That means bond and you want to sell the bond in the near future. Well, guess what? Any fluctuation in the value, you will look it in the profit and loss. Same thing with equity. Other things, that instrument, as I just told you, not qualifying for amortized cost or not qualifying for fair value OCI. So that instruments, that's not the other two categories, can be a trading. Equity, instrument, not included in fair value OCI. And derivative is not qualifying as hedge accounting. We're going to look at derivatives later, but those derivatives are not for hedging purposes. They're for speculation purposes. We'll talk about that later. Just know that derivatives not qualifying for hedge accounting. So those are the things that go under the category of trading. Okay, category of fair value through profit and loss. I call it trading. So if you ask me, I call this category trading. This is trading category. This is the trading category. I call this category F, V, OCI available for sale. And the third category is amortized cost. So if I want to simplify this for you and use simple terminology, okay, this is amortized cost. I call this held to maturity. You're holding the bond and only the only thing that goes under this category is bond or debt. That means bond. I use both words because depending on your textbook, financial asset at fair value through comprehensive income, those are available for sale. And those you could have bonds and stocks. So you could have equity investments as well as debt investments, financial asset at fair value through profit and loss. Again, I call these trading. And you could have bonds, you could have stocks. And as you saw, you could have derivatives, okay, etc. Those are things that you are planning to trade. Okay, so those, if I want to simplify this, this is how I would simplify it for you for financial asset. Now, let's talk about financial liabilities because everything that we talked about here is all financial asset. Let's talk about financial liabilities. Under financial liabilities, we only have two categories. They could either measure measured at amortized cost or the financial liability measured at a measured financial liability at fair value through profit or loss. So notice we don't have OCI category for financial liabilities. And what are financial liabilities? It's when we borrow money. When we sell the bond, not when we buy the bond. When we buy the bond, it's a financial asset. So when we buy a bond, that's a financial asset. Simply put, we debit investment. We debit, let me just kind of clarify this, we debit bond investment or bond security for 100,000, credit cash 100,000. Now, when we sell, issue or sell, when we issue or sell a bond, now we're issuing or selling the bond. We are the company. Then this is a financial liability. Here what we do is we debit cash 100,000 and we credit bonds payable. So now we're talking about financial liabilities. And this is what we're talking about here. This is the financial liability. The bonds payable is the financial liability. So financial liabilities, they could have only two categories. Financial liabilities measured at cost and obviously kind of cost is cost is cost. And financial liabilities at fair value through the P&L. So financial liabilities measured at cost, that's the default category for most financial liabilities. When you borrow money, well, you plan to pay it off. That's what you do. And you would say, I'm going to keep it. I'm going to keep it. I'm going to report it at amortized cost. Financial liabilities at fair value, now this category would include liabilities held for trading. Again, you want to trade them. Derivatives, not designated as part of a hedging relationship. Remember, you have derivatives, but the purpose of that derivative is for speculation, not for hedging, not to protect yourself. And liabilities that the entity up to classify using the fair value option. Simply put, you have a liability.  You sell a debt and you can buy it back or a derivative, some sort of a financial liability derivatives that's not part of hedging. And there is this category, which we'll talk about later, fair value option. You could always say, this is my liability and I want to treat it as fair value. If that's the case, then the financial liability is reported at fair value with profit and losses going through the profit and loss statement, not profit and loss. The fair value adjustment is going through the profit and loss statement. What are some examples of these financial instruments? Interest rate swap, we'll talk about those in future chapter. Commodities, future contract, forward foreign exchange contract, contingent consideration, promise as part of M&A transaction. Those are financial liabilities that you want to treat at fair value. You just decide that's why you want to do it because usually all liabilities, the default category is cost, which is easy. You just report them at cost. You don't make any changes. You don't make any changes. Let's look at few examples. Example one, we're going to look at financial liabilities measured at amortized cost, which is kind of the default category for financial liabilities. On January 1st, year one, K-Corp issued a 1 million 5% bond at face value. It means they want to borrow $1 million. They're willing to pay 5% on that bond. The bond pay interests annually and mature on December 31st, year two. The company incurred bank and legal fees of $70,000 in conjunction with assuring the bonds. That's fine. So here's how we do it under IFRS. Under IFRS, the debt issue cost reduce the fair value of the liability. The fair value of the liability, we wanted to borrow a million, but it cost us $70,000. Therefore, we're going to debit cash, $930,000. This is how much cash we received, and we're going to have a bond spable of $930,000. Now, USGAP, they treat this differently, but we're not going to look at USGAP. Okay? Now, what's going to happen? Now, we have a financial liability. It's right here. Okay? This is the financial liability. Okay? Now, what are we going to do? We're going to keep it at cost. We're going to keep it at amortized cost. So subsequent to the initial recognition, which you already recognize it, the bond payable are measured at amortized cost. So amortized cost, what's the cost for it $970? So the difference between the fair value of the bond at the issuance date and the face value is amortized to expense over the life of the bond using the effective rate. So the difference between the fair value, the fair value was how much was it was $930. This is how much we received for the bond. And the bond face value, the bond face value is a million. So this was $930. This was a million. The difference is $70,000. Okay? It's going to be expense over the life of the bond using the effective interest rate method. Now, if you don't know what the effective interest rate method, I'm going to cover it briefly, but hopefully you know what the effective interest rate method is. Okay? Let's assume the effective interest rate just happened to, we choose this number, 8.978, doesn't matter. Okay? So now what's going to happen? We issued the bond for $930,000. We consider this the fair value when we issued it because that's how much we received. This bond will pay 5% interest. So every year we're going to get $50,000 computed as a million times 5%. December 31st, interest and principal payment of $1,050,000. This is year 2. December 31st, year 2. They're going to pay us back the bond, plus they're going to pay, plus they're going to make an interest payment. So let's go ahead and look at the journal entries when we actually make, receive the first interest payment. So let's take a look at the interest expense. How do we, how do we compute the interest expense? The interest expense is computed by taking the fair value of the bond, which is $930,000. I like, I prefer to call this the book value. The book value of the bond, the book value of the bond is $930,000. IFRS like to call it fair value. It's because that's how much they received, but regardless, then you multiply this by the effective interest rate. It should be given to you times 8.9781. And that's going to give you interest expense of $83,496. You're going to debit interest expense that much. You're going to credit cash $50,000. Why credit cash $50,000? Because you have to pay cash $50,000. That's how much the bond is paying. Then you're going to amortize $33,496 to the bond payable. Remember the bond, the financial liability initially had a cost of $930,000. Now you just added to it this $33,496. It means now it has a fair, it has an amortized cost of $963,496. So this is the amortized cost after the first year. Now here comes year two. Year two, you have to compute the interest expense. How do you compute the interest expense? You're going to take $963,000, the fair value of the bond, $496,000, which is what we computed earlier times, 8.9781%. That's going to give you this figure right here. That's the interest expense. We're going to credit cash $50,000. Then we're going to add to the bond $33,496. Well, let's do that. Let's add to the bond $33,946. Let's go back here and add to the bond $33,000. I'm sorry. It should be. I made a mistake here. The difference is not $33,496. It's going to be $36,504. So if we add $36,504. Now the bond has a face value of a million because it matured in two years. Always the bond goes back to the face value. Now we're going to pay off the bond. We're going to pay a million dollars. We're going to debit bonds, payable a million, credit cash a million. The bond is gone. Let me go back here. Once we pay off the bond, we debit the bond a million. The bond is gone. The bond is gone. So this is accounting for a financial liability measured at amortized cost. We don't have to worry about the fair value in amortized cost. We just keep it and take care of the transaction. Now under U.S. Gap, that issue cost, that issue cost, which was the $70,000, are deferred as an asset and amortized on a straight line basis. This is for U.S. Gap. So if you really think about it, the total expense for year one and year two for the company, for in year one and in year two, $50,000, $50,000 for the cash interest expense, and amortization of that over two years is $35,000. Every year is $85,000, over two years obviously, because in year two, you did the same thing, $50,000 plus $35,000. So this is for one year. This is for one year, $50,000 cash plus $35,000. Assuming we're going to do this equally, we're going to amortize this equally. So for every year, you incurred $85,000 in cost, in total expense, in total expense in year one, and in year two, we'll be determined the same way. Now equity investment classified, again, I'm using here the straight line, which we did not use the straight line in the example. I'm just telling you as in total, the total expense. Let's take a look at an example, or let's discuss again, the equity investment classified as fair value through OCI. Remember fair value through OCI, it means you bought it, you might sell it, you may not sell it depending on the situation. Okay, now, if you have an equity investment, because here we're talking about equity investment, let's talk about USGAP. If it's equity investment USGAP, as I told you before, all the adjustments go through income. So USGAP is don't worry about OCI, there's no such thing as OCI equity, there is no OCI for USGAP, I just want to clarify this. In the case of equity investment, not held for trading, IFRS allows company to make one time a revocable election at the initial recognition to classify it as fair value OCI. So when you make an investment, you have to say, I'm going to make this, I made an equity investment, I bought, I bought a stock, and I want to classify it, I want it to be part of fair value OCI. So you have to make that adjustment. And by making this adjustment, you're going to shield any gains and losses from profit and loss statement, your shield means you're not, they're not going to go there. Okay, and you have to make this election security by security basis. So under IFRS nine, every time you make an equity investment, you have to say this equity investment is fair value OCI, if you want it to be in fair value OCI. And cumulative gains and losses are not recycled through the income statement upon disposal. So the good thing about not the good thing could be good, it could be bad about IFRS nine, if you say I bought an equity investment and I want it to be fair value OCI, the profit and the loss from that investment, whether it's realized or unrealized never goes on the income statement, it stays in OCI stays in OCI. And let's look at an example to illustrate this concept. Porfirio purchased marketable securities for $20,000 on October 15 year one. At the time of the purchase Porfirio makes fair value OCI election. Well, they said we want it to be fair value OCI. If they did not make this election, it would have been fair value PL profit and loss. It means they bought this investment, they're planning to hold it a little bit, but they're also willing to sell it if the time is right. So we're going to debit marketable securities fair value OCI, which is a financial asset or an investment or an act. So this account, this marketable securities, I can call it equity investment if I want to equity investment, fair value OCI. Okay, it's an equity investment. I can call it a financial asset is too broad, but it's a form of financial asset. Okay, so this is the financial asset. This is the financial asset. Okay, now we're going to credit cash $20,000 on December 31 at the end of the fourth physical quarter, the securities have risen in value to $22,000. There we go. Now it went up in value by 2000. What do we have to do? We have to book that gain, that unrealized gain. We're going to debit marketable securities FCOCI. So basically we're going to go ahead and this marketable securities fair value OCI, fair value OCI, initially was $20,000. Now we're going to add to it 2000. Now it's $22,000. It's marked to market because the market value is $22,000. We mark it up to the market. Then we credit. This is the important part. The income doesn't go on the income statement. It goes into OCI, other comprehensive income. This is a balance sheet account. This is a balance sheet account. So it doesn't go on the income statement. Now then the company on February 1st year to sold it for $23,000 and the company will account for this investment in the following manner. Now they sold the investment for $23,000. They would receive cash $23,000. They will have to remove the investment for $22,000. Now the investment is down to zero. Then they have a gain. Again, the gain goes into OCI. The gain goes into OCI. This is different than USGAP. USGAP, if you have an equity investment, everything goes into the income statement. One more time. If you are using USGAP, you will not have other comprehensive income. You will have a gain that goes into. You'll have a gain income statement. Here you would have a gain. Same thing. You will have a gain income statement. That's the difference. Okay. For IFRS it's a little bit different. Now notice all gains on fair value OCI are recorded in other comprehensive income and never recycled through the income statement. They never see the income statement. Now companies, they have the discretion to take this OCI and close it to retained earnings because it's technically a gain. So if they want to, they can do that. Otherwise, they're both on the balance sheet anyhow. So notice no income statement effect. However, if we received any dividend from that stock, it will go into that income obviously. Okay. If we received any dividend income, it goes through the income statement. But if we received any gains, it doesn't make it to the income statement. Let's work one more example. A debt instrument classified as fair value OCI. Now again, same thing. Now we bought a bond and we're going to classify it fair value OCI. We could have also classified this bond fair value PL, but we don't. We're going to classify it fair value OCI because fair value OCI is what gives us more problems. Fair value PNL just goes into the profit and loss. Okay. So that securities classified as fair value OCI receive a similar accounting treatment to equity securities with one exception. So we need to know what exception is. And that exception is when you sell it upon disposal, realized holding gain a recycle through the income statement. So the realized holding gain, the gain when you sell it, you have to report it on the income statement and take it out of OCI. And I will show you this in a moment and an example. So suppose Santiago purchased 5% bond for $1 million on January 1st, the bond mature December 31st. Year two, Santiago meets the IFRS business model because it sell because it sells its debt securities unfrequently. That's fine. So we're going to debit debt securities, fair value OCI, 1 million credit cash. Again, this account could be called a debt investment. This could be called debt investment, fair value OCI. So basically it's your financial asset. This is your financial asset right here. This is your financial asset. Okay. For simplicity, assume that the bond will pay interest once a year on December 31st. Interest rate in the economy fell during year one because of the bond to appreciate. So when interest rate goes down, the bond value will go up. The fair value of the bond is 1.2 million. Okay. So at the end of the year, the bond paid interest and the fair value went up. That paid interest 50,000. Debit cash, credit, interest income. Why 50,000? It's a million dollar and the bond pays 5% equal to 50,000. That's good. We'll take that. Debit cash, credit, interest income. Now we have to make an adjustment to the debt security because the value went up by 200,000. Remember we have a debt. We have a debt securities, fair value OCI and we have there a million. Now the value of that security is 1.2 million. Therefore we have to debit this account 200,000. We have to increase it by 200,000. Now it's 1,200,000. Now we're going to take the gain and put it into OCI, other comprehensive income. Sorry I did not put the word income there. Okay. So this is the adjustment. This is the credit. The other comprehensive income is the credit. I should have moved a little bit further too. Okay. Now rather than holding them to maturity because we're not going to hold them to maturity, if we're holding them to maturity, we would have to report them at amortized costs. So we're not doing so rather than hold them at maturity. San Diego sold the bond for 1.2 million on January 1st. So San Diego said, I'm going to take advantage of this increase in value and sell the bond for 1.2 million. Okay. So let's record the sale. We're going to debit cash 1.2 million. We're going to credit this account debt securities.  I should have kept it here. I should have kept it here. Okay. Remember I had 1.2 million in this account just a second ago. So I'm going to remove this. Then I am also going to remove this other comprehensive income. I'm going to have to debit my other comprehensive income. This is a debit. This is a debit. I'm going to debit my other comprehensive income to remove it. Then I'm going to credit again. So this is, let me just show you the entry, the 1.2 million for the cash. This is a debit. This should be a debit. So this is the debit. So now I fixed it. This is the debit. So notice, I have to remove that credit. I have to remove the 200,000 and the realized gain on the debt goes into the income statement. And this is what we're saying at the beginning. Upon disposal, the realized gain is recycled through the income statement. It means we take the gain out of OCI. It went out of OCI and went into the income statement. That's not something that we don't do if we had an equity instrument, an equity investment, an equity investment. But now we have a debt investment. We don't do this with equity, but we do it with debt. Okay, and this is what we did earlier with equity. Let me just show you. Let me just show you the equity, just so you will see what we did. When we sold the equity, the profit went into OCI and it never left OCI. Okay, the gain went into OCI. We have 3000 and OCI. Now again, as I told you, they can close that gain to retained earning if they chose to, but that's up to them. Okay, let's wrap this up. Just a review for financial assets. We have three classification, amortized cost, fair value OCI and fair value profit and loss. Again, think of profit and loss as trading. For amortized cost, think about debt security, about bonds and that are held to maturity. Remember, there are no stocks in this category because stocks don't mature. Fair value OCI, we could have both debt as well as equity securities or investments. You could have stocks and bonds. Remember that equity gains and losses stay in OCI debt. If you have bond gain and losses, they are recycled through the income statement when they are sold. They are recycled, but the equity are not recycled. They stay in OCI. Fair value profit and loss. Remember, this is like trading. You could have both debt and equity securities not classified as amortized cost and not classified. So basically, if it's not amortized cost, if it's not FCOCI, then it must be FVPL. Remember, gain and losses go through the income statement. Financial liabilities, we only have two categories, fair value profit and loss and amortized cost. Under the amortized cost, we have bonds payable and notes payable. Under fair value profit and loss, we have liabilities that are held for trading, derivatives, not for hedging. That means for speculative purposes and fair value option when we choose the fair value option for our debt. Not that investments, our debt. Here we are talking about financial liabilities. Debt, not debt investment, because debt investments are financial assets. And gain and losses is recycled through the income statement. I hope this session clarified IFRS 9. If you happen to visit my website for additional lecture, additional lessons, please consider supporting the channel. If you have any questions, email me. Good luck on your exam and study hard. It's worth it.


So, Shirley, when people approach you and ask, I want to become a service designer, or I want to become a better service designer, what do you tell them? Besides run away? No, really. The most important thing that you can do, if you want to get into service design, is start doing it. So, a lot of people talk about service design using service design methods and so on. But I think that service design thinking can be applied to almost anything. So, I'll give you an example. My mom is a nurse, and I showed her some examples of different service design methods, and she uses those with her team of nurses. My partner, he's a musician, and I showed him some of the methods, and he uses them to write music. So, even if you're not a designer yet, you can start to practice the methods wherever you are.


This video is called Relationships of Angles and Sides in a Triangle. What we're going to do is determine the relationship between the measures of the given angles in a triangle. It's really kind of nice because when you have any kind of triangle, should let me draw one a little bit different than that, how about something like this, you look here and you can see that in a triangle, the opposite side of the largest triangle is the longest side, which makes sense. If you find the angle that is the biggest that has the widest opening opposite it, the side opposite or across from it is going to be the longest side because the angle opens up the biggest. So for the same way in a triangle, the opposite side of the smallest angle would be the shortest. So in your picture, if you look for the smallest angle right here, since the smallest angle is the smallest opening, the side and across from it will be the smallest. So that by process of elimination gives you kind of the middle angle or the medium angle will open up to be the medium or mid-length side. So just try some questions using this information. So here I have triangle I, G, H, and we want to name the longest side. I know that my triangle, all the angles have to add up to be in 180 degrees. So if I do 90 plus 24, I have 114. And then if I do 180 minus 114, that gives me 66. So I know that this angle I right here is 66.  And 66 is my medium or middle angle, so that will give me my medium side. So the answer to this problem to name the longest side will be side I, H, or H, I, it doesn't matter what order you put the letters in. The next problem, problem number two, gives us a triangle J, K, L. It says to name the smallest angle. Well, this is interesting because they don't give us any information about the angles. They give us side lengths of 5, 6, and 8. Well, let's remember the shortest side, which is my 5, the angle opposite will be my shortest angle. 8, which is my longest side, the angle opposite that will be my long, or not my longest angle, but it would be my largest or my biggest angle. And then 6, well that is the side length that's in the middle, so the angle opposite that will be the one that is in between or in the middle. So to name the smallest angle, it looks like it will be angle L. My next example, I have triangle ABC. They give me side lengths of 50, 54, and 58. Looks like we're going to do some inequalities looking at greater than, less than, or equal to. We're going to compare the angles. So before I actually get into problems three and four, let's spend a little bit of time in our picture. So it looks like 58 is my longest side. So angle B opposite that will be my largest or my biggest angle. 50 side AB is my shortest side, so the angle opposite that will be my shortest or smallest angle. And then since 54 is the side length in the middle, the angle opposite that, angle A will be my side length, or will be my angle that's in the middle or between. So now let's look at this. For problem three, they want us to compare angle B with angle C. Well angle B, I have marked as the largest or the longest or the biggest angle. It wouldn't be the longest, it would be the largest. And angle C is as the smallest one. So when I put in my inequality, remember the alligator always wants, is I was hungry, wants to eat the biggest. So it looks like we're going to eat angle B. So we'll have measure of angle B is greater than the measure of angle C. Now let's look at problem four, A and C. A is marked with an M as my medium or my middle one, and C is marked with an S as my smallest one. So again, the alligator wants to eat what's the biggest. So the sign or the mouth will open up to angle A. This will read measure of angle A is greater than the measure of angle C. Let's try one more. This is similar to the last one where we're doing greater than, less than or equal. But this time we're trying to compare side lengths. When you look at the picture of triangle D, E, F, they only give us information about angle measures. No problem. Let's go ahead. The biggest angle measure looks to be angle D with 67 degrees. So the side opposite that will be our longest. My shortest angle E is 52 degrees. So the side or segment opposite that. The side opposite that will be my shortest. And then 61 is the angle in the middle. It's the middle one. So the side opposite that will be a medium length or in the middle. So let's do some comparing. E, F, I have marked with my largest. And F, D is marked as my smallest. Alligator wants to eat what's biggest. So it's going to eat E, F. So E, F is greater than F, D. And D, E, for problem number six. D, E is marked as a medium or a middle. And E, F is marked as my largest. Alligator wants the teeth opening. Eating what is the biggest. So it looks like we'll have a less than sign in there. So we'll have D, E is less than E, F. Remember when doing problems like this, please notice in the last few problems I totally ignored this stuff. I totally ignored what it was asking me to actually do. And I spent some time up here in my picture filling out what I could. Because once I fill out everything in my picture, it made answering the problems down here very simple and very fast. Always copy down your diagrams, fill in everything that you can. Then go ahead and answer the questions. Good luck.