ACC 306 Week 4 Communication Case 18-10

Communication Case 18-10ACC 306 Week 4 Communication Case 18-10Communication Case 18–10 Should the present two-category distinction between liabilities and equity be retained? Group interaction. ● LO1The current conceptual distinction between liabilities and equity defines liabilities independently of assets and equity, with equity defined as a residual amount. The 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. Two opposing viewpoints are:View 1: The distinction should be maintained.View 2: The distinction should be eliminated and financial instruments should instead be reported in accordance with the priority of their claims to enterprise assets.One type of security that often is mentioned in the debate is convertible bonds. Although stock in many ways, such a security also obligates the issuer to transfer assets at a specified price and redemption date. Thus it also has features of debt. In considering this question, focus on conceptual issues regarding the practicable and theoretically appropriate treatment, unconstrained by GAAP.Required:Which view do you favor? Develop a list of arguments in support of your view prior to the class session for which the case is assigned.Follow this link to get a similar paper written from scratchPlace an order for this assignment or any other paper with us. We guarantee that the paper will be delivered within the specified deadline. We also have a personalized customer support and you will be able to communicate with your writer throughout the order preparation process. Thank you for choosing us.