Convertible notes are:
A) Essentially the same as debentures and need to be recorded as liabilities.
B) A form of asset.
C) Are often referred to as hybrid securities and should be recorded as equity as they will eventually be converted into shares.
D) Part debt and part equity and should be disclosed as such according to AAB 132.
E) None of the given answers.

Question

Quizplus · Accepted Answer

Convertible notes are hybrid securities that have characteristics of both debt and equity. According to AASB 132, they should be disclosed as such, reflecting their dual nature.

Convertible Notes Are