When convertible debt is converted to common shares, IFRS requires that this is recorded by the
A) book value method.
B) relative fair value method.
C) market value method.
D) residual method.

Question

Quizplus · Accepted Answer

Under IFRS, when convertible debt is converted into common shares, the book value method is used. This means that the carrying amount of the debt is transferred to equity, without recognizing any gain or loss in the income statement.

When Convertible Debt Is Converted to Common Shares, IFRS Requires