a)

1. Credit-Impaired Bonds: The existing qualifying bonds not exchanged under the programme would be accounted for as credit impaired, and categorized as a stage 3 exposure for the purposes of ECL (Expected Credit Loss) assessment.
2. Derecognition and New Contracts: When the invitation to exchange bonds is accepted, new contracts between the Government of Ghana (GoG) and bondholders will be established, resulting in the derecognition of the old bonds and recognition of new financial assets.
3. Interest Write-Off: Interest accrued on the old bonds, which will be forfeited, should be written off and recognized in profit or loss.
4. ECL Measurement: The Expected Credit Loss (ECL) should be measured up to the date of derecognition to determine the carrying value at the time of derecognition.
5. Derecognition Gains/Losses: The difference between the carrying value of the old bonds and the fair value of the new bonds at the date of derecognition should be recognized as a gain or loss in profit or loss.
   (5 points @ 2 marks each = 10 marks)

b)
Advantages of Investing in Bonds:

1. Capital Security: Bonds are typically redeemable, meaning the principal investment will be returned at the end of the term.
2. Guaranteed Interest: Interest payments must be made by the issuer, regardless of how well or poorly the company performs.
3. Debt Ranking Priority: In the event of liquidation, debt ranks higher than equity, giving bondholders a higher chance of recovering their investment compared to shareholders.
4. Legal Security: Some bonds may be secured on the company’s assets, providing further protection to investors.

Disadvantages of Investing in Bonds:

1. Predictable Returns: The returns on bonds are fixed and predictable, with limited potential for capital appreciation compared to shares.
2. Limited Profit Potential: Shareholders can benefit from increased dividends and capital gains when a company performs well, but bondholders are limited to fixed interest payments.
   (6 points @ 1.67 marks each = 10 marks)