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Accounting for convertible debt: a fundamental financial instrument approach to accounting for convertible debt as a single instrument

Accounting for convertible debt: a fundamental financial instrument approach to accounting for convertible debt as a single instrument
Accounting for convertible debt: a fundamental financial instrument approach to accounting for convertible debt as a single instrument
The fundamental financial instrument approach of the FASB proposes that a compound instrument, such as a convertible bond, can be understood as being made up of fundamental financial instruments. Two methods of accounting for a convertible bond are seen as consistent with this approach: (a) recognise the fundamental components of a convertible bond separately in the accounts; and (b) analyse a convertible bond in terms of its fundamental components and account for it as a single instrument. There is currently disagreement amongst accounting regulators as which of these methods should be used.
96-116
University of Southampton
Casson, P.
5ac137b1-dc94-41fb-82c5-736ad5be75c2
Casson, P.
5ac137b1-dc94-41fb-82c5-736ad5be75c2

Casson, P. (1996) Accounting for convertible debt: a fundamental financial instrument approach to accounting for convertible debt as a single instrument (Discussion Papers in Accounting and Management Science, 96-116) Southampton, UK. University of Southampton 27pp.

Record type: Monograph (Discussion Paper)

Abstract

The fundamental financial instrument approach of the FASB proposes that a compound instrument, such as a convertible bond, can be understood as being made up of fundamental financial instruments. Two methods of accounting for a convertible bond are seen as consistent with this approach: (a) recognise the fundamental components of a convertible bond separately in the accounts; and (b) analyse a convertible bond in terms of its fundamental components and account for it as a single instrument. There is currently disagreement amongst accounting regulators as which of these methods should be used.

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Published date: 1996

Identifiers

Local EPrints ID: 35652
URI: http://eprints.soton.ac.uk/id/eprint/35652
PURE UUID: 9f3dbd66-9a27-4c2c-afff-b789054889d6

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Date deposited: 26 Apr 2007
Last modified: 11 Dec 2021 15:29

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Contributors

Author: P. Casson

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