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Posted On: 08/09/2022 6:35:08 PM
Post# of 156072
On induced conversions of convertible bonds:
This explains the accounting treatment:
https://money-zine.com/definitions/investing-...nversions/
The other side of the the expense goes to additional paid-in capital.
If there were any tax effect it would likely have also been disclosed. It appears to have no tax effect.
https://www.withum.com/resources/tax-treatmen...and-safes/
Quote from above article:
The conversion has no tax consequences to the issuer, except that it stops paying interest, and taking interest deductions if it is not subject to section 163(l). Note that the legislative history to section 163(l) states that “it is not expected that the provision will affect debt with a conversion feature where the conversion price is significantly higher than the market price of the stock on the issue date of the debt.”
This explains the accounting treatment:
https://money-zine.com/definitions/investing-...nversions/
The other side of the the expense goes to additional paid-in capital.
If there were any tax effect it would likely have also been disclosed. It appears to have no tax effect.
https://www.withum.com/resources/tax-treatmen...and-safes/
Quote from above article:
The conversion has no tax consequences to the issuer, except that it stops paying interest, and taking interest deductions if it is not subject to section 163(l). Note that the legislative history to section 163(l) states that “it is not expected that the provision will affect debt with a conversion feature where the conversion price is significantly higher than the market price of the stock on the issue date of the debt.”
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