On 1 July 2022, SFU Co issued a convertible bond at par value of $20 million and has recorded it as a non-current liability. The bond is redeemable for cash on 30 June 2024 at par. Bondholders can however, opt for the conversion in the form of a fixed number of shares. Interest on the bond is payable at a rate of 4% a year in arrears. The interest paid in the year has been presented as finance cost. The interest rate on similar debt without a conversion option is 10%, with a present value of $17,91 million at 1 July 2022.

Discuss how the convertible bonds should be accounted for during the 2023 financial period.

Please make reference to the IFRS Standard and IAS Standard, Definition, Recognition, Derecognition and calculations etc so I can understand