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SIC 17 states that transaction costs, defined as incremental external costs directly attributable to an equity transaction, should be accounted for as a deduction from equity. The Interpretation applies to transactions involving the issuance or acquisition of instruments of the reporting enterprise that are classified by that enterprise as equity and result in a net increase or decrease to equity. Typical examples of equity transactions subject to the Interpretation would include the issuance of common shares for cash and the acquisition by an enterprise of its own equity instruments. Costs of a stock exchange listing of shares already outstanding, a secondary offering of shares, a share split, or a stock dividend would not be considered costs of an equity transaction subject to the Interpretation.
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