전환금융상품에 내재된 전환권의 부채·자본 분류에 관한 사례연구

This study addresses the recent controversy over the debt-equity classification of convertible instruments. Recently, numerous companies have issued financial instruments that can be converted to their own common shares (hereinafter ‘convertible instruments’), often including a clause that allows the conversion price to be re-adjusted when certain conditions are satisfied (hereinafter a ‘refixing clause’) subsequent to issuance. Currently, the classification of conversion rights embedded in convertible instruments differ depending on the issuer: some classify the conversion rights as debt and others as equity. The inconsistency in the accounting treatment of similar financial instruments impairs the comparability of financial information across firms significantly. This study examines the accounting treatment of redeemable convertible preferred stocks (hereinafter ‘RCPS’) of two companies. Company W and K issued RCPSs with similar specifications, but Company W classified the embedded conversion rights as debt while Company K classified the conversion rights as equity. We analyze the International Financial Accounting Standards (IAS 32) and related guidance provided by the financial authorities upon which each of the companies base their decisions. We also review the impact of the discussion paper issued in 2018 by the International Accounting Standards Board on the accounting treatment of conversion rights. This study aims to reduce confusion in the Korean capital market by enhancing the understanding of accounting standards on the debt-equity classification of financial instruments and familiarizing the concept of regulatory forbearance.