Financial Derivatives - Accounting translation issue

[Sabrina84]

Hi everyone!

My name is Sabrina and I'm a sworn translator from Argentina. I've come across the following sentence when translating the notes to a financial statement and I can't grasp the meaning of it. I'd very much appreciate it if an accounting expert could help me out.

"We record the value allocated to warrants issued with the convertible notes, measured at fair value and recognized by allocating a portion of the proceeds to derivative liabilities with an offset to discount on the convertible note. The recorded discount is accreted as interest expense using the effective interest method over the life of the debt.

I understand the meaning of offset but I'm confused about the general meaning and the preposition "TO". Is it an offset account to reduce the value of a discount on a convertible note, i.e., an offset against a discount or am I totally confused.

Could anyone paraphrase it for me?

Thanks in advance!

Sabrina

 

[kirby]

by allocating a PORTION of the proceeds to derivative liabilities ...and an amount equal to that PORTION is posted to a discount account related to the convertible note.

If still unclear, let me know and I will try another way

Good luck ¡ Suerte!