1.‘Convertible notes where it is highly likely the holder will convert the notes into ordinary shares of the issuer should be classified as equity.’ Discuss  2. Explain the residual approach to the measurement of the component parts of a compound financial instrument. What other methods could be used? 3. AASB 9 identifies a number of categories of financial instruments. Should the nature of financial instruments make any difference to their accounting treatment? Give reasons.  4.Hancock, in Discussion Paper No. 14 (AARF, 1990), considers it inappropriate to distinguish between hedging and trading activities for the purpose of reporting financial instruments in general purpose financial statements. Outline the arguments for and against this view.