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Draft Interpretation: Put Options Written on Non-controlling Interests [ED]

Comment period ended on October 1, 2012

Next steps:

To be determined. This item now forms part of the IASB’s research project on Financial Instruments with Characteristics of Equity.

Last updated:

March 2013


A put option is a contract that gives the holder of the option the right to sell a specified asset to the writer of the option at a specified price within a specified time. If a parent entity is obliged to purchase the shares of its subsidiary for cash or for another financial asset, the parent must recognize a financial liability in its consolidated financial statements for the present value of the option exercise price. The IFRIC was asked to consider how to subsequently measure that financial liability, because diversity exists in practice. In response to that request, the IFRIC has proposed that all changes in the measurement of that financial liability should be recognized in profit or loss in accordance with IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 9, Financial Instruments.

The draft Interpretation issued for comment includes a Basis for Conclusions section which details how the IFRIC reached its conclusions on this issue.

Recent activities

March 2013

Most recently, at their meeting in March 2013, the IASB discussed the IFRIC’s views and the feedback received in the comment letters. The IASB tentatively decided to re-consider the requirements in paragraph 23 of IAS 32, including whether all or particular put options and forward contracts written on an entity's own equity should be measured on a net basis at fair value.

July 2012

On July 10, 2012, the AcSB issued a draft Interpretation that corresponds to the IFRIC’s draft Interpretation.

Mary 2012

On May 31, 2012, the IFRIC published for public comment proposed guidance on the accounting for a put option written by a parent entity on the shares of its subsidiary held by a non-controlling-interest shareholder.

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