Financial Instrument – P2- ACCA

Dear Sir / Madam,

How to recognize difference between
1) Compounded Instrument and
2) Embedded Derivative

As IFRS 9 has 2 separate treatment for them
1) For Compounded Instrument its being separation of debt and equity element and treat them accordingly.
2) For Embedded derivative its being to be recognizing as one class ( and not separating them) and treat them at Fair Value through Profit or Loss.

My doubt is Debt Instrument giving equity conversion option is Compounded Instrument or Embedded Derivative !
Kindly help.

Deep