Accounting treatment of convertible debentures

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indira (Querist)
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10 March 2010 Dear all,

What is the accounting treatment of convertible debentures. Are they equity or debt? where is it placed in the balance sheet

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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10 March 2010 Dear Indira,

Convertible Debentures are debt instrument. They are shown in liability side under the head Debentures.

Regards.

indira

indira (Querist)
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10 March 2010 Thanks. But what about subordinate debt? I am actually looking for quasi equity instruments and their treatment. would be great to hear from u

indira

indira (Querist)
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10 March 2010 What are quasi equity instruments in India btw?

vrnanda

vrnanda (Expert)
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13 March 2010 hi indira,
convertible debentures will be classified as a debt.

depending on the charge that you have created that will be classfied as a secured or unsecured debts.

the right to get them converted will be considered only at the time of caclulating the diluted EPS. and discloure should be made in the notes, all the terms of conversion.

indira

indira (Querist)
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15 March 2010 Thanks Mr Nanda

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