Compound Financial Instruments

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... be classified separately as financial liabilities, financial assets or equity instruments. Measurement - The issuer of a bond convertible into ordinary shares first determines the carrying amount of the liability component by measuring the fair value of a similar liability (including any embedded non-equity derivative features) that does not have an associated equity component. The carrying amoun .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Steps need to follow for accounting of Compound Financial Instrument: - Step 1 - Compound Financial instrument has to measure in initial recognition in 2 parameters Financial Liability Component & Equity Instrument Component * For Financial Liability Component - Present Value of future cash flows in the nature of 'Financial Liability' discounted using market interest rate on similar instrument .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X