- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
P2-D2.
P2-D2.-
Posts
-
iyamu
- Topics: 275
- Replies: 167
- ☆☆☆
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?
P2-D2
- Topics: 4
- Replies: 6317
- ☆☆☆☆☆
No, convertible are accounted for using split accounting, look at the notes and you will see the treatment.
iyamu
- Topics: 275
- Replies: 167
- ☆☆☆
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?
P2-D2
- Topics: 4
- Replies: 6317
- ☆☆☆☆☆
B cannot be correct as we would not show the instrument entirely as equity regardless of what the investors are intending to do.
iyamu
P2-D2- You must be logged in to reply to this topic.