EFRAG considers that the proposals should be more clearly articulated as an exception to the current equity/liability model in IAS 32.
EFRAG broadly agrees with the proposals in the exposure draft. EFRAG considers that foreign currency rights issues are in substance equity and therefore support the IASB’s decision to amend IAS 32 Financial Instruments: Presentation urgently.
EFRAG does, however, have concerns about some aspects of the proposals, in particular:
· It does not find the IASB’s arguments in the Basis for Conclusions comprehensive and considers that they could more clearly articulate the reasoning behind the proposals and their relationship to earlier agenda decisions.
· It considers that the proposals should be more clearly articulated as an exception to the current equity/liability model in
IAS 32.
In order to minimise the amendments being susceptible to structuring risk
EFRAG believes that the
IASB should provide further guidance on the nature of rights issues.
Deadline for comment is 31 August 2009
© EFRAG - European Financial Reporting Advisory Group
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