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Financial Instruments with Characteristics of Equity - IASB

Date recorded:

At its meeting on April 20, 2016, the IASB continued its discussion of the potential separate presentation requirements for subclasses of liabilities and of equity. They focused their discussion on the Gamma approach. The Board indicated that it would improve comparability to apply the separate presentation requirements to stand-alone and embedded derivatives that depend on the residual amount.

The Board also discussed the specific requirements for determining the amount to be attributed to classes of equity other than ordinary shares. For non-derivative equity claims other than ordinary shares (such as non-cumulative preference shares), the Board indicated that it would be useful to attribute amounts based on the existing requirements for such instruments in IAS 33, Earnings per Share. For derivative equity claims (such as warrants), the Board discussed three approaches to the attribution of profit or loss and other comprehensive income. The Board was not asked for decisions at this meeting.

Review the IASB Update on the IASB's Web site.

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