Proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity features when

Question

Quizplus · Accepted Answer

When the warrants issued with the debt securities are nondetachable, the proceeds should not be allocated between debt and equity features. This is because the warrants cannot be separated from the debt security and traded independently, so they should be treated as part of the overall debt security.

Proceeds from an Issue of Debt Securities Having Stock Warrants