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Puttable Financial Instruments and Obligations Arising on Liquidation (Amendments to IAS 32 and IAS 1 Presentation of Financial Statements) was approved for issue by eleven of the thirteen members of the International Accounting Standards Board.
The IFRIC noted that paragraph 11 of IAS 32 defines a financial instrument as ‘any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.’
IAS 32 Financial Instruments: Presentation. WHAT TYPE OF INSTRUMENT IS IT? FINANCIAL INSTRUMENT. A contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
IAS 32 Financial instruments: Presentation establishes the principles for presenting financial instruments, from the perspective of the issuer, as liabilities or equity and for offsetting financial assets and financial liabilities.
IAS 32 specifies presentation for financial instruments. The recognition and measurement and the disclosure of financial instruments are the subjects of IFRS 9 or IAS 39 and IFRS 7 respectively. For presentation, financial instruments are classified into financial assets, financial liabilities and equity instruments.
The revised IAS 32 addresses the classification as financial assets, financial liabilities or equity instruments of financial instruments that are indexed to, or settled in, an entity’s own equity instruments.
IAS 32 Financial Instruments: Presentation. This communication contains a general overview of the topic and is current as of June 15, 2021.
