ASH ACC 306 W EEK 4 C OMMUNICATION C ASE C HECK THIS A+ TUTORIAL GUIDELINE AT HTTP :// WWW. ASSIGNMENTCLOUD. COM / ACC ASH / ACC WEEK -4- COMMUNICATION - CASE F OR MORE CLASSES VISIT HTTP :// WWW. ASSIGNMENTCLOUD. COM C OMMUNICATION C ASE 18–10 S HOULD THE PRESENT TWO - CATEGORY DISTINCTION BETWEEN LIABILITIES AND EQUITY BE RETAINED ? G ROUP INTERACTION. ● LO1 T HE CURRENT CONCEPTUAL DISTINCTION BETWEEN LIABILITIES AND EQUITY DEFINES LIABILITIES INDEPENDENTLY OF ASSETS AND EQUITY, WITH EQUITY DEFINED AS A RESIDUAL AMOUNT. T HE PRESENT PROLIFERATION OF FINANCIAL INSTRUMENTS THAT COMBINE FEATURES OF BOTH DEBT AND EQUITY AND THE DIFFICULTY OF DRAWING A DISTINCTION HAVE LED MANY TO CONCLUDE THAT THE PRESENT TWO - CATEGORY DISTINCTION BETWEEN LIABILITIES AND EQUITY SHOULD BE ELIMINATED. T WO OPPOSING VIEWPOINTS ARE : HTTP :// WWW. ASSIGNMENTCLOUD. COM

V IEW 1: T HE DISTINCTION SHOULD BE MAINTAINED. V IEW 2: T HE DISTINCTION SHOULD BE ELIMINATED AND FINANCIAL INSTRUMENTS SHOULD INSTEAD BE REPORTED IN ACCORDANCE WITH THE PRIORITY OF THEIR CLAIMS TO ENTERPRISE ASSETS. O NE TYPE OF SECURITY THAT OFTEN IS MENTIONED IN THE DEBATE IS CONVERTIBLE BONDS. A LTHOUGH STOCK IN MANY WAYS, SUCH A SECURITY ALSO OBLIGATES THE ISSUER TO TRANSFER ASSETS AT A SPECIFIED PRICE AND REDEMPTION DATE. T HUS IT ALSO HAS FEATURES OF DEBT. I N CONSIDERING THIS QUESTION, FOCUS ON CONCEPTUAL ISSUES REGARDING THE PRACTICABLE AND THEORETICALLY APPROPRIATE TREATMENT, UNCONSTRAINED BY GAAP. R EQUIRED : 1. W HICH VIEW DO YOU FAVOR ? D EVELOP A LIST OF ARGUMENTS IN SUPPORT OF YOUR VIEW PRIOR TO THE CLASS SESSION FOR WHICH THE CASE IS ASSIGNED.