Two companies,Company A and Company B,issue convertible bonds at par.If Company A uses IFRS and Company B follow U.S.GAAP,the amount Company A records for the debt will be greater than the amount Company B records for the debt.

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Under IFRS, the issuer of a convertible bond must separate the liability and equity components based on their fair values at issuance, often leading to a lower debt value recorded compared to U.S. GAAP, where the convertible bond is typically recorded entirely as debt at issuance unless it has beneficial conversion features or requires bifurcation as a derivative.

Two Companies,Company a and Company B,issue Convertible Bonds at Par