14.0 Complex Financial Instruments
Learning Objectives
After completing this chapter, you should be able to:
- Describe complex financial instruments and their role in accounting and business.
- Describe the basic differences in the accounting treatments for long-term debt and equity.
- Describe the two methods acceptable to IFRS and ASPE to separate, classify, measure, and disclose complex financial instruments such as convertible debt and convertible preferred shares.
- Describe various derivatives such as options, warrants, forwards, and futures.
- Explain the accounting treatments and reporting requirements for stock options plans.
- Recall that analyses of complex financial instruments use the same techniques as those used in non-convertible debt and equity instruments.
- Explain the similarities and differences between ASPE and IFRS regarding recognition, measurement, and reporting of complex financial instruments.
Introduction
This chapter continues from earlier chapters that examined long-term debt and equity. However, the focus will now be on complex financial instruments, such as convertible bonds and convertible preferred shares, as well as derivatives, such as options and warrants.
Chapter Organization
