Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 31

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 31
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 the same amount   
 in the underlying securities. Similarly, the percentage increase or decrease in the value of an equity security warrant may be greater than the percentage increase or decrease in the value of the underlying common stock. Warrants may relate to the   
 purchase of equity or debt instruments. Debt obligations with warrants attached to purchase equity securities have many characteristics of convertible securities and their prices may, to some degree, reflect the performance of the underlying stock.  
 Debt obligations also may be issued with warrants attached to purchase additional debt instruments at the same coupon rate. A decline in interest rates would permit a Fund to sell such warrants at a profit. If interest rates rise, these warrants     
 would generally expire with no value.                                                                                                                                                                                                                     |
| L. | Cash and Cash Equivalents                                                                                                                                                                                                                                 |
|    | Cash and                                                                                                                                                                                                                                                  
 cash equivalents include deposits held at financial institutions, and are inclusive of dollar denominated cash, foreign currency, and deposit with brokers for written options.                                                                           |

82

NOTES TO FINANCIAL STATEMENTS (Continued) January 31, 2025

| M. | Segment Reporting                                                                                                                                                                                                                            |
|    | Accounting                                                                                                                                                                                                                                   
 Standards Codification (“ASC”) 280, Segment Reporting, established disclosure requirements relating to operating segments in financial statements. The Funds have adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 
 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to enhance reportable operating segment disclosure requirements. Operating segments are defined as components of a reporting entity about which      
 separate financial information, including disclosures about income and expenses, is available that is regularly evaluated by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess the Funds’         
 performance. Each Fund is structured as an investment company and represents a single operating segment. Subject to the oversight and, when applicable, approval of each Fund’s Board of Trustees, the Funds’ Investment Adviser acts as the 
 respective Fund’s CODM. The CODM monitors each Fund’s operating results as a whole, and each Fund’s long-term strategic asset allocation is determined in accordance with the terms of its prospectus based on its defined investment        
 objective. The financial information provided to and reviewed by the CODM is consistent with that presented in each Fund’s financial statements. Adoption of the new standard impacted each Funds’ financial statement note disclosures only 
 and did not affect any Fund’s financial position or the results of its operations.