Convertible Notes Are

question 56

Multiple Choice

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 IAS 32.

---

Definitions:

RRSP

A Registered Retirement Savings Plan, which is a retirement savings and investing vehicle for employees and the self-employed in Canada, offering tax benefits.

Maturity Value

The amount of money an investment will grow to over a period of time at a specified interest rate.

Interest Rate

The percentage of a loan that is added on as interest for the borrower, usually stated as an annual rate.

Economic Value

A measure of the benefit provided by a good or service to an economic agent.