The provisions of S653-655 apply in the context of non-standard convertibles where the conversion option is bifurcated as an embedded derivative under IAS 39, IFRS 9 (or, previously, under FRS 26). See CFM55420 for details of the relevant conditions. These rules do not apply to issuers of standard convertibles, because in applying these accounting standards, the conversion right would give rise to an equity component, rather than an embedded derivative.

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