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AASB 2011-8 - Amendments to Australian Accounting Standards arising from AASB 13 - September 2011
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AASB 2011-8 - Amendments to Australian Accounting Standards arising from AASB 13 - September 2011
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59 In the Application Guidance, paragraph AG31 is amended as follows (deleted text is struck through):
AG31 A common form of compound financial instrument is a debt instrument with an embedded conversion option, such as a bond convertible into ordinary shares of the issuer, and without any other embedded derivative features. Paragraph 28 requires the issuer of such a financial instrument to present the liability component and the equity component … as follows:
(b) The equity instrument is an embedded option to convert the liability into equity of the issuer. The fair value of the option comprises its time value and its intrinsic value, if any. This option has value on initial recognition even when it is out of the money.