F2 question on Convertible Bonds
If a right to convert to shares is not exercised and bonds are redeemed at maturity date transactions would be:
CR Cash (for face value paid out)
DR Liabilities (for full value available after years of amortisation)
So WHAT HAPPENS to the equity element of the initial recognition that we have sat on SoFP?
P
P2-D2Tutor·
Hi,
The discounted figure is what we recognise as the liability on initial recognition and so is the opening figure in our financial liability table.
Thanks
C
carl·
Nice video. But I could not understand one thing, the total PV which is the liability $89604 then how come that becomes B/F for year 1 in the next slide. Please explain
If a right to convert to shares is not exercised and bonds are redeemed at maturity date transactions would be:
CR Cash (for face value paid out)
DR Liabilities (for full value available after years of amortisation)
So WHAT HAPPENS to the equity element of the initial recognition that we have sat on SoFP?
The discounted figure is what we recognise as the liability on initial recognition and so is the opening figure in our financial liability table.
Thanks