Discuss the equity portion of convertible debt except

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A securities industry group objected to part of APB Opinion No. 10, which required that all convertible debt be broken down into debt and equity portions at the time of issue. The debt portion (bonds payable plus premium or minus discount) was to be booked at the effective rate without the conversion privilege with the equity portion credited to paid-in capital. The industry group was pleased by APB Opinion No. 14, which did not break out the equity portion of convertible debt except if detachable stock warrants were issued. Why was the securities industry group (which represented investment bankers who floated large loans for industry) unhappy with Opinion No. 10 and pleased with Opinion No. 14?

Reference no: EM131762089

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