The AcSB commends the IASB for striving to address the current application challenges and agree that standard setting activity is required to address issues that currently arise with the application of IAS 32.

Overall, their response letter clearly articulates that they are of the view that the IASB’s preferred approach is not robust enough to address all the challenges identified in practice. The new terminology introduces very complex concepts that are likely to create additional application challenges.

Although they appreciated the IASB’s effort to expand the disclosures for equity instruments, they did not agree with the proposal to expand the attribution of income and expenses to equity instruments other than ordinary shares.

The AcSB welcomed some of the IASB’s proposals – especially on the retention of the puttable exception and the disclosure of terms and conditions of financial instruments, especially as it relates to equity instruments.

Review the press release on the AcSB's website and the full letter on the IASB's website.