The accounting for bonds with warrants in IFRS and US GAAP differs in following ways:
1) Under IFRS, the cost of bond issuance are netted against the carrying amount of the bonds; while in GAAP the cost of bond issuance are recorded as an asset.
(2) IFRS permits only effective-interest method. However GAAP allows the usage of straight-line method of amortization for bond premium or discount in scenarios where the recorded amount is not different materially from effective- interest amortization.
(3) Under IFRS, companies will not use discount or premium accounts however indicates the bond at the net amount
(4) IFRS makes an assumption that all restructurings will be accounted for debt extinguishments. But GAAP, has given specific guidelines for restructuring of debt and calls it as "trouble- debt restructurings".
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