Debenture Add Calculated Field For Free

A debenture is essentially a long-term loan that a corporate or government raises from the public for capital requirements. For example, a government raising funds to construct roads for the public.

A convertible debenture is a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period. Convertible debentures are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.

It means that for every debenture of Rs. 1,000 denomination, you will get 20 equity shares. The issuer decides the conversion ratio at the time of the debenture issue. You have the right to hold on to the debenture till maturity and not convert it into equity.

Convertible debentures are issued by companies as a means of deferred equity financing in the belief that the present share price is too low for issuing common shares. These securities offer a conversion into the underlying issuer's shares at prices above the current level (referred to as the conversion premium).

The debentures which can't be converted into shares or equities are called non-convertible debentures (or NCDs). Description: Non-convertible debentures are used as tools to raise long-term funds by companies through a public issue.

Debenture bonds are liabilities of the company because they represent debts that will have to be repaid in the future. Liabilities are shown on the balance sheet as either current liabilities or long-term liabilities.

Debentures are the creditors' equity, hence its appears in the liabilities side of th. balance sheet under the heading Long-term Liabilities.

US vs UK debentures In the US, a debenture is a medium to long-term loan, issued to a company by an investor. Think of it as an unsecured loan that is supplied in good faith unlike UK debentures, the loan is not backed up by physical assets; only by the company's good reputation in the eyes of the investor.

The rate of interest is a prefix value to the debenture, say 9% Debentures and, therefore, is payable even if the company incurs a loss. It is a charge against profit.We show Interest on Debentures as 'Finance Cost' in Statement of Profit and Loss.

Examples of Noncurrent LiabilitiesNoncurrent liabilities include debentures, long-term loans, bonds payable, deferred tax liabilities, long-term lease obligations, and pension benefit obligations. The portion of a bond liability that will not be paid within the upcoming year is classified as a noncurrent liability.