A Study on Accounting for Convertible Bonds
Date Issued
2006
Date
2006
Author(s)
Hung, Chih-Ying
DOI
zh-TW
Abstract
Convertible bonds are the hybrid securities with the properties of the bond and stock. In Taiwan, for the demand of investors, most convertible bonds have call option, put option, and reset option. Because the ROC Statement of Financial Accounting Standards no. 34 abolished the ROC Statement of Financial Accounting Standards no. 21, a portion of the proceeds received for bond should be attributed to the conversion and accounted for as paid-in capital.
The purpose of this paper is to investigate the ROC Statement of Financial Accounting Standards no. 34 and the ROC Statement of Financial Accounting Standards no. 36 to understand the accounting for convertible bonds. This study also discuss how to account for convertible bonds when convertible bonds are embedded in other options. The remainder of this paper is based on proprietary theory to propose the accounting for performance-contingent claims or securities and make an example of convertible bonds.
Subjects
負債
權益
轉換公司債
所有權理論
debt
equity
convertible bonds
proprietary theory
Type
other