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Financial Instruments – I can see that we work out the present value of cash flows when we look at convertible debt questions. When we are paying a liability back over the years etc..
But I am now reviewing a question which asks me to work out the the liability within the SOFP (over a period of years). However this does not take into consideration the time value of money?
Sorry if I have explained this badly, you can see the examples I am referring to in Chris’s Financial Liabilities lecture & Convertible lecture.
Not entirely sure what you are asking here but I think it may have to do with the split between equity and debt components of an instrument and the fact that this is worked out and then essentially frozen despite fact that convertibility component may become much more valuable.Is this the thing or one of the things with which you may be concerned?
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