Which of the following statements is correct?(a) IFRS separates the proceeds of a convertible bond between debt and equity by determining the fair value of the debt component before the equity component.(b) Both IFRS and GAAP assume that when there is choice of settlement of an option for cash or shares, share settlement is assumed.(c) IFRS separates the proceeds of a convertible bond between debt and equity, based on relative fair values.(d) Both GAAP and IFRS separate the proceeds of convertible bonds between debt and equity.
Which of the following statements is correct?(a) IFRS separates the proceeds of a convertible bond between debt and equity by determining the fair value of the debt component before the equity component.(b) Both IFRS and GAAP assume that when there is choice of settlement of an option for cash or shares, share settlement is assumed.(c) IFRS separates the proceeds of a convertible bond between debt and equity, based on relative fair values.(d) Both GAAP and IFRS separate the proceeds of convertible bonds between debt and equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements is correct?
(a) IFRS separates the proceeds of a convertible bond between debt and equity by determining the fair value of the debt component before the equity component.
(b) Both IFRS and GAAP assume that when there is choice of settlement of an option for cash or shares, share settlement is assumed.
(c) IFRS separates the proceeds of a convertible bond between debt and equity, based on relative fair values.
(d) Both GAAP and IFRS separate the proceeds of convertible bonds between debt and equity.
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