In September 2007 the IFRIC received a request for it to provide guidance on the appropriate interpretation of paragraph 2(g) of IAS 39 Financial Instruments: Recognition and Measurement. This paragraph exempts from the scope of IAS 39 'contracts between the acquirer and a vendor in a business combination to buy or sell an acquiree at a future date'. The submitter requested guidance on the following questions:

• Does this scope exception apply only to binding contracts to acquire shares that constitute a controlling interest in another entity, or does it apply more widely to options that, if exercised, would result in the acquisition of such a controlling interest?
• If the exception applies only to binding contracts to acquire shares that constitute a controlling interest in another entity, does it apply to any binding contract, or only to contracts that cover the period necessary to complete a business combination once its principal terms have been agreed?

The IFRIC had a lively discussion on what type of contracts qualify for the exception in IAS 39.2(g), if analogies can be drawn to other scenarios and how conditionality should be considered. The IFRIC asked the staff to redraft the rejection wording to reflect the discussions. If the IFRIC members give their consent to the redrafted version the tentative agenda decision will be published in the November 2007 IFRIC Update. Otherwise it will be on the agenda for the next IFRIC meeting again.