The IASB published for public comment a discussion paper on the distinction between equity financial instruments and other financial instruments.
The discussion paper is the first stage of the IASB’s project to improve and simplify the requirements in IAS 32 Financial Instruments: Presentation. Stakeholders around the world have raised two broad classes of criticisms of the current requirements:
- the principles in IAS 32 are difficult to apply
- the application of those principles can result in an inappropriate classification of some financial instruments
The project is a modified joint project between the IASB and the US FASB. In a modified joint project, one board leads the initial stage. The FASB led the research stage of this project and published a Preliminary Views document Financial Instruments with Characteristics of Equity in November 2007.
The paper will be freely available on the IASB Website from 10 March 2008.
Deadline for comments is 5 September 2008.
Press release
FASB paper: Financial Instruments with Characteristics of Equity
© Graham Bishop
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