in millions cash 103 100 million convertible bonds

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Unformatted text preview: ments. ($ in millions) Cash (103% × $100 million)  Convertible bonds payable (value of the debt only)  Equity–conversion option (difference) 103 98* 5 *The discount is combined with the face amount of the bonds. This is the “net method” – the preferred method under IFRS. Compound instruments such as this one are separated into their liability and equity components in accordance with IAS No. 32. If the bonds have a separate fair value of $98 million, we record that amount as the liability and the remaining $5 million as equity. 14-23 Bonds With Detachable Warrants Stock warrants provide the option to purchase a specified number of shares of common stock at a specified option price per share within a stated period. A portion of the selling price of the bonds is allocated to the detachable stock warrants. 14-24 Bonds With Detachable Warrants On January 1, 2013, HTL issued $100,000,000 of 8% bonds On January 1, 2013, HTL issued $100,000,000 of 8% bonds due in 2020 at 103 (103% of face value). Accompanying each due in 2020 at 103 (10...
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This document was uploaded on 02/16/2014 for the course ACC 311 at Cal Poly Pomona.

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