In a Convertible Note,the Embedded Option to Convert the Liability

question 81

True/False

In a convertible note,the embedded option to convert the liability into the equity of the issuer has a fair value of zero on initial recognition when the option is out of the money.

---

Definitions:

Nonrecurring Gains

Profits that are not expected to happen regularly or repeatedly, coming from events like asset sales, lawsuit winnings, or one-time events affecting financial performance.

Income From Continuing Operations

Earnings generated from the normal, recurring activities of a business, excluding any one-time transactions or discontinued operations.

Nonrecurring Losses

Losses that are not expected to happen again in the foreseeable future, differentiated from normal business operations.

Accounting Events

Transactions or occurrences that result in changes to the financial statements of a company, requiring recognition or disclosure.