From the definition, convertible bonds are all called convertible corporate bonds. Like other bonds, convertible bonds also have stipulated interest rates and maturities, but the difference from ordinary bonds is that convertible bonds can be converted into stocks under certain conditions. Regardless of conversion, convertible bonds are simply regarded as bonds with pure debt value or direct value. If directly converted into stocks, the value of convertible bonds is called conversion value.

The full name of convertible bonds is convertible corporate bonds. The subscription of convertible bonds is a low-risk and high-yield investment opportunity, and it is also an investment opportunity that attracts investors' attention.

Extended information:

Convertible bonds conversion:

1. When bondholders convert into stocks, there are two accounting treatment methods to choose from: book value method and market price method.

2. the book value method is adopted, and the book value of the converted bonds is regarded as the value of the renewed shares, and the conversion gains and losses are not recognized. Those who agree with this approach believe that the company cannot generate profits and losses due to the issuance of securities, and even if it does, it should be used as (or offset) capital reserve or retained profits and losses.

furthermore, the purpose of issuing convertible bonds is to convert bonds into stocks. The issuance of stocks and the conversion of bonds are a complete transaction, not two separate transactions, and the profit and loss should not be recognized during the conversion.

3. under the market price method, the value basis of the exchanged shares is the more reliable market price or the market price of the converted bonds, and the conversion gains and losses are confirmed.

the reason for adopting the market price method is that the conversion of bonds into stocks is an important stock activity of the company, and the market price is quite reliable. According to the two information quality requirements of relevance and reliability, the conversion gains and losses should be confirmed separately. Furthermore, the confirmation of shareholders' rights and interests also conforms to the historical cost principle by adopting the market price method.

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