Accounting treatments that would be an example of Faithful representation
I think option d and b are correct .
Though option D was the only correct answer chosen.
Option B .....Including a convertible loan note in equity on the basis that the holders are likely to choose the equity option on conversion.
Option D .... Derecognising factored trade receivables sold without recourse to the seller.
Is convertible loan note not accounted for in equity section of FS? Since it has equity Option?
Ask the Tutor ACCA FR
FR Dec 2016
7y ago#1No, convertible are accounted for using split accounting, look at the notes and you will see the treatment.
off course i know we apply split accounting where we have both equity and liability elements. This is why i am not getting it. Why then NO? The equity option goes to the equity section of the financial position. Or i am not getting the question right?
7y ago#3B cannot be correct as we would not show the instrument entirely as equity regardless of what the investors are intending to do.
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