What wiuld be a good argument against viewpoint 1

Some financial instruments such as convertible bonds, preferred stocks, warrants and options can have both debt and shareholder's equity features. They can be converted into common stock or into preferred stocks by investors. This topic has been debated for several years on whether:

Viewpoint 1: Issuers should account for an instrument with both liability and equity characteristics entirely as a liability or entirely as an equity instrument depending on which characteristic governs. Viewpoint 2: Issuers should account for an instrument as consisting of a liability component and an equity component that should be accounted for separately. Which of the two viewpoints do you favor? Develop an argument in support of your choice. In considering this question, you should disregard the current position of the FASB on the issue. Instead, focus on conceptual issues regarding the practicable and theoretically appropriate treatment, unconstrained by US GAAP and IFRS.

Some financial instruments such as convertible bonds, preferred stocks, warrants and options can have both debt and shareholder's equity features. They can be converted into common stock or into preferred stocks by imestors. This topic has been debated for several years on whether: - Viewpoint 1: Issuers should account for an instrument with both liability and equity characteristics entirely as a liability or entirely as an equity instrument depending on which characteristic governs. - Viewpoint 2: Issuers should account for an instrument as consisting of a liability component and an equity component that should be accounted for separately. Which of the two viewpoints do you favor? Develop an argument in suppeiet of your choice: In considering this question, you should disegard the current position of the FAS8 on the issue. instead, focus on conceptual hwes regarding the practicable and theoretically appropriate treatment, unconstrained by US GAPP and IFRS. Aso, focus vour deliberations on convertible bonds as the instrument with both liability and equity characteristics Work to demonstrate your understanding of the material from this module and, where necessary, inchide your sources Be sure to post an initial, substantive response by Thursdoy at \\( 11: 59 \\mathrm{pm} \\).MT, and respond to two or more classmates or the instructer with substantive responses by Sunday ot \\( 11: 59 \\mathrm{p} . \\mathrm{m} . \\mathrm{MT} \\). A substantive initial post onswers the question presented completely and/or asds a thoughtfut que hion pertaining to the topic Be sure your post is