신주인수권부 사채의 회계처리에 대한 소고

Abstract

When bonds with detachable stock warrants are issued, these warrants represent right that

enable the security holders to acquire a specified number of common shares at a given price

within a certain time period. The question arises whether the allocation of value to the stock

warrants is consistent with the accounting treatment for convertible debts. It may be argued

that to deny recognition value to the conversion feature merely looks to the form of the

instrument and does not deal with the substance of the transaction. A portion of the proceeds of

bonds issued with detachable warrants be allocated to the stock warrants and accounted for as

additional pain-in capital. This allocation is based on the relative fair values of the bonds and

warrants as soon as both elements trade separately on the open market. The issuance of bonds

with detachable warrants involves two securities, one a debt security, which will remain

outstanding until maturity, and the other a warrant to purchase common stock. At the time of

issuance, separable instrument exist, and therefore separate treatment is justified.

Nondetachable warrants, however, do not require an allocation of the proceeds between the

bonds and the warrants. The entire proceeds are recorded as debt. However, the accounting

treatment for detachable bonds and for nondetachable bonds in Korea appears the same, which

may be incorrect. This paper suggests an appropriate treatment for bonds with warrants.