How Design Features Affect the Balance Sheet Presentation of CoCo-bonds

2 Pages Posted: 16 Oct 2020

See all articles by Matthias Petras

Matthias Petras

University of Cologne - Department of Banking; University of Cologne; University of Cologne - Faculty of Management, Economics and Social Sciences

Kai Coufal

affiliation not provided to SSRN

Date Written: April 14, 2020

Abstract

CoCo-bonds are hybrid capital instruments. Therefore, they can be classified as debt or as equity on the balance sheet. International Financial Reporting Standards do not yield clear guidance on how to account for CoCo-bonds. We investigate empirically how CoCo-bonds are accounted for in bank practice. We identify relevant design features which decide whether the bond is classified as debt or equity. Thereby, we shed light on the factors which determine the balance sheet representation and provide useful information for the process of designing the bonds, considering its consequent accounting treatment.

Keywords: CoCo-bonds; IFRS; hybrid capital; financial instruments, financial reporting

JEL Classification: G1; G21; G23; M41

Suggested Citation

Petras, Matthias and Coufal, Kai, How Design Features Affect the Balance Sheet Presentation of CoCo-bonds (April 14, 2020). Available at SSRN: https://ssrn.com/abstract=3683131 or http://dx.doi.org/10.2139/ssrn.3683131

Matthias Petras (Contact Author)

University of Cologne - Department of Banking ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://www.bankseminar.uni-koeln.de/en/seminar/staff/staff/petras/

University of Cologne ( email )

Albertus Magnus Platz
Cologne, NRW 50923
Germany

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

Kai Coufal

affiliation not provided to SSRN

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