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    Question

    XYZ Ltd issues compulsorily convertible debentures

    redeemable only in equity after 3 years. Interest is paid at 6% annually. Under Ind AS 32, how will this instrument be classified?
    A Entirely as liability Correct Answer Incorrect Answer
    B Entirely as equity Correct Answer Incorrect Answer
    C Equity and liability both Correct Answer Incorrect Answer
    D FVTPL Correct Answer Incorrect Answer
    E OCI instrument Correct Answer Incorrect Answer

    Solution

    Compulsory conversion means thereтАЩs no contractual obligation to deliver cash, making it an equity instrument under Ind AS 32.

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