Question: When an entity issues a financial instrument, it has to determine its classification either as debt or as equity. The result of the classification can

When an entity issues a financial instrument, it has to determine its classification either as debt or as equity. The result of the classification can have a significant effect on the entitys reported results and financial position. Discuss the implications for a business if a substance approach is used for the reporting of convertible bonds. Explain what is meant by the term split accounting when applied to convertible bonds. (14 marks)

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