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11:20 Apr 1, 2005
This question was closed without grading. Reason: Other
German to English translations [PRO] Bus/Financial - Law: Taxation & Customs / end of year accounting
German term or phrase:Unterverzinslichkeit
"Der anhand des abgezinsten Vorteils der Unterverzinslichkeit berechnete Preis des Wandlungsrechts wurde in die Kapitalrücklage eingestellt."
I'm not familiar with the tax principles involved here, so am only able to make some attempt at a literal translation. The whole phrase "anhand des abgezinsten Vorteils der Unterverzinslichkeit" is my problem.
I feel that this is such a specialised subject that I do not have the confidence to reject any of the three proposed answers. Kieran's sounded extremely confident and I actually went with that, adding a note for my client's benefit. I am very grateful to all three answerers.
Explanation: The point is that the value of the conversion right (ie the call option on its own shares the issuer has sold) is implied by the gap between the market rate of interest on the company's debt and the (invariably lower) rate on the convertible:
'the value of the conversion right, calculated as the discounted present value of the benefit of the below market coupon, was credited to...'
Kieran McCann United Kingdom Local time: 08:33 Works in field Native speaker of: English PRO pts in category: 70