Redwood Co$.,$ a fast$-$growing outdoors equipment startup, uses IFRS. To raise

capital, it is considering the issuance of convertible bonds. It is also

contemplating the establishment of share$-$based compensation plans to pay and

motivate its key employees.

Regarding the accounting for dilutive securities and share$-$based compensation

plans, answer the following questions:

Explain how convertible bonds should be reported in the company's

statement of financial position at the date of issuance.